WASHINGTON - August 24 - Oil prices are expected to hit a record high $50 a barrel this week, underscoring the need for a sound, forward-looking energy policy for the United States. Spurred on by the escalating conflict in Iraq, supply disruptions in Russia, and rising world demand, oil prices are now 49 percent higher than they were a year ago.
"With oil prices approaching $50 a barrel, the Bush administration has failed to give the country what it needs: an energy policy with real solutions like making our cars and trucks go farther on a gallon of gas, increasing our use of clean, renewable energy sources like wind and solar power, and aggressive measures to increase energy efficiency," said Carl Pope, Sierra Club Executive Director. "Taking these steps would not only protect the environment and increase Americas energy security, but it would save consumers billions of dollars."
While rising oil prices reflect current concerns surrounding international production, it also reflects growing international demand. The U.S. Department of Energy projects that world oil consumption will jump from its current levels of 79.26 million barrels per day (mbd) to 120.9 mbd by 2025 -- an increase of 53 percent. Given this trend, the United States will become increasingly dependent on an international oil market where demand stretches supply to its maximum. This strained marketplace will become increasingly susceptible to price spikes and disruptions.
This spells trouble for the United States which consumes 25 percent of the worlds oil, yet sits on less than 3 percent of the proven oil reserves. According to the Department of Energy, even if we drilled for oil in the Arctic Refuge, we would still need to import over two-thirds of our oil. As a result, the only way to cut U.S. oil dependence is to reduce demand. The greatest reductions in demand can come from U.S. vehicles, which consume over 8 million barrels of oil per day.
"We will never be able to drill our way to energy independence," said Pope. "Given this reality, the only way to decrease Americas exposure to international oil price spikes is to cut our oil consumption. Existing gas-saving technology could be saving consumers money at the gas pump right now."
Existing technology could ensure that all new cars, trucks and SUVs average 40 miles per gallon within 10 years, saving the average consumer over $2,200 in net savings over the life of a vehicle and nearly 4 million barrels of oil per day by 2020 -- more oil than we currently import from the entire Persian Gulf or could ever take out of the Arctic National Wildlife Refuge, combined.
"Instead of offering a sound energy policy, the Bush administration has rekindled its efforts to promote an outdated energy policy," said Pope. "The same old plan -- more polluting power plants, more tax breaks for oil companies -- wont solve our problems or protect American consumers from rising oil prices."
The Bush administrations own Department of Energy stated two months ago that if the Bush administrations energy policy became law, "changes to [the] production, consumption, imports, and prices [of energy] are negligible." This policy undermines basic environmental protections like the Clean Air Act, the Safe Drinking Water Act, and opens up our pristine public lands and coastlines to increased oil and gas drilling. At the same time, it rewards polluting industries with billions of taxpayer dollars.
"Our continuing oil dependence puts our economy, national security, and environment at risk. America needs a strong energy policy that will move us forward into the 21st century, and we deserve an energy policy that offers responsible, clean energy solutions," said Pope. "Its time to scrap the Bush administrations flawed energy policy and start putting clean energy technology to work."