Kagen’s energy plans for Congress make sense

Oconto County Reporter

Kagen’s energy plans for Congress make sense

The Editorial

July 23, 2008

During a recent stop in Marinette, Democrat Congressman Dr. Steve Kagen, told Marinette Eagle Herald Reporter Donn Williams about his proposals for short and long term solutions for our worsening energy crisis.  
His observations, this reporter believes, makes common sense.  But he may face obstacles in Congress trying to implement them.  This is what our 8^th District Congressman suggests:

“I’ve been listening to people in the oil industry, in our district, across Wisconsin, and across the country, and the three things they believe in are the three things I’m promoting…drill for new oil in America, invest in renewable sources of energy and prevent market speculation,” Kagen said during a stop in Marinette this week.

Kagen claims there are more than 100 million barrels of oil beneath the continental United States that could lessen this country’s dependence on foreign oil.  “Where should you be drilling?  Right where we know the oil is and it’s right here under the continental United States and the outer continental shelf—82 percent of which is already under lease (by the oil companies).”

The congressman believes the Bush administration’s push to open up the Arctic National Wildlife Reserve to oil exploration would do little to make the nation less dependent on foreign oil.  He says only one well has been drilled in the reserve so far and there is no reliable estimate of the amount of oil there  He points to the 22 million acre National Petroleum Reserve about 100 miles to the west, that was opened to oil drilling during the Clinton administration.  Only three million acres are leased by oil companies and they’ve drilled only 25 exploratory wells with zero production.

“It’s not Saudi Arabia,” Kagen said.  “There is enough oil in Alaska to fuel the world’s energy supplies for about three months.  It will take 10 years to get it to your gas station.  It will drop by one or two pennies the price at the pump.”

            To encourage oil companies to do more drilling and oil exploration on lands they lease within the continental U.S., Kagen recently voted for and the House approved HR 6251, a bill labeled “Use It or Lose It”.  The bill requires energy companies to either drill or explore for oil on lands where they hold leases and permits for drilling, or the government will take them away.  “The bill says, if you’re an oil company, you’ve got a lease to drill.  Use it or we’ll give it to somebody else,” Kagen said. 

            Currently oil companies are drilling on only 12 of the 68 million acres the government has leased to them.

            Kagen is also working to prevent oil price manipulation.  He says 38 percent of the inflated price of gasoline is the result of the devalued dollar.  Market demand is responsible for a fraction of the increase.  Speculation is the primary culprit.

            He points to testimony before the House’s subcommittee on energy and commerce that indicated, if speculators were prohibited from purchasing oil and gasoline, the price at the pump would drop $2 a gallon within 30 days.

            Kagen has co-sponsored new legislation that would require speculative investment firms to take possession of the oil they buy, just as consumers do when they purchase gasoline at the pump.  He’s hoping that will result in increased oil supplies and cause gasoline prices to fall.

            “If somebody on a computer buys a million barrels of oil, they take possession on their computer,” Kagen explained.  “I want them to be in position to take possession on their property or in the business they own.  If we get the speculators out, the price will come back to supply and demand.”

            Kagen is calling on the Bush administration to compel the Commodity Futures Trading Commission to “squeeze out market speculation in commodities” by enforcing existing laws.

            And he says the president should start selling 500,000 barrels of oil a day from the government’s strategic petroleum reserve.  “If he does that every 100 days we’ll still have 90 percent of our reserve,” he said.  “Our average cost (for oil) in that reserve is $28 per barrel.  So, let’s sell it to China for $140 a barrel.  We’ll make billions and billions of dollars and that money should be used to invest in renewable resources of energy.”

            Effective this week, the U.S. stopped buying oil and putting it into the strategic petroleum reserve.  Kagen expects the resulting increased supply in the market should cut gas prices at the pump by 25 cents.

            Finally, the congressman says the country needs a new energy policy that’s moves as rapidly as possible away from fossil fuels and towards renewable energy sources.

            “I am absolutely convinced when we have a president that will design an energy policy that makes sense for America and not for big oil, not for big banks, not for big investment firms, and not for big insurance companies, we’ll all come out a lot better,” Kagen said.  “Right now we have two oil men in the White House who are feeding their friends at the tail end of an administration.