John Felmy, chief economist with the American Petroleum
Institute (API) trade group, said Wednesday that the US
must develop more of its own oil and natural gas and allow
additional oil imports from Canada.
Those steps would both increase energy security and help
address higher gasoline prices, he said.
conference call with reporters, Felmys remarks were as
By far, the single biggest factor in todays
higher gasoline prices is the rising cost of crude oil,
Felmy said. It has driven virtually all the rise in
Together, what refiners have to pay on the world
market for crude plus gasoline taxes accounts for over $3.00 -
or about 84% - of what people are paying at the pump today.
Exports are not causing gasoline prices to rise. Less
than one-sixth of product exports have been gasoline, and only
a tiny amount of this was the reformulated gasoline used in
larger metropolitan areas.
US refiners produce fuels primarily for American
markets and always have. However, when supplies are available
to export - as they are today because of weak US demand
they put downward pressure on the prices of the gasoline and
other products we import.
Exports also mean jobs for Americans, including good
paying US refinery jobs, and a lower trade
The administration understands that rising crude oil
prices are driving higher gasoline prices. We agree with that.
But we dont agree on solutions. The industry must be
allowed to develop at home more of its ample crude oil and
natural gas resources.
More US barrels on crude markets would help drive down
crude costs and reduce gasoline prices. We need policies that
ease access to US oil and natural gas resources, which are
still very ample.
We also need policies that add critical
infrastructure, such as building the Keystone XL pipeline, to
bring in more of Canadas vast supplies of oil, and
policies that keep regulations and tax policy reasonable.
The administration has not stepped up to the plate on
any of this.