Mr. Chairman, thank you for holding this hearing today. I appreciate your leadership as we address our nation’s limited refining capacity. I would also like to welcome Jonathan Adler, Associate Director of the Center for Business Law & Regulation at Case Western Reserve University in my state of Ohio.
Unfortunately, over the past several weeks, we have been painfully reminded that our nation is far from being energy independent. As I have said before, we need a second Declaration of Independence, so this country will become substantially more energy independent, and our economy and national security will no longer be held hostage. Currently, for instance, we import close to 60 percent of our oil.
Specifically, Ohioans and all Americans are very concerned about high prices at the pump. According to the Energy Information Administration, the average price of gas in Ohio on September 5 was $3.02 per gallon of regular gasoline. This was an increase of $0.42 after the Katrina disaster and an increase of $1.23 from one year ago.
While gas prices have skyrocketed recently, this problem is a result of years of inaction. As my colleagues know, I have been fighting for years for a comprehensive energy plan to address this dilemma.
The good news is that we finally passed an energy bill this summer. The bad news is that it took us a long time to get done – and our families and businesses across the nation are now literally paying for it. While we made progress with the recent energy bill, there are a number of issues that must be further addressed. In particular, the Gas PRICE Act focuses on our limited refining capacity. As many of you know, no new refineries have been built in the United States since 1976, and today, our refineries are already operating at near peak. For example, even with surplus crude oil, we would lack the refining capacity to make enough transportation fuels to meet demand.
As Chairman Inhofe helped bring to light in a May 2004 hearing, historic economic factors mixed with regulatory uncertainty have impeded new refinery construction.
One major problem is NIMBY – Not In My Back Yard. I remember the case of the Marathon Ashland pipeline that now provides a direct connection from one of the nation’s largest refineries to central Ohio. After the project was announced in 1998, there was intense opposition with many environmental lawsuits filed to stop this project.
Notably, in 2004, as this project was being completed, Tom Stewart, executive vice president of the Ohio Oil and Gas Association in Granville, which represents 1,250 independent oil and gas producers, stated that “This is just one example of how hard it is to upgrade that infrastructure. We were perplexed why people would fight that and then complain about the price of gasoline or fuel.”
This remains the reality that we must fix, and this legislation brings people to the table early and makes the construction or expansion of refineries a community-driven process. I also want to clarify that this legislation should be distinguished from Congressman Barton’s bill in the House. This is NOT the same piece of legislation.
I am pleased with this legislation for a number of reasons. First, this bill addresses not only the building of new refineries but the expansion of existing refineries, such as the four in Ohio. Moreover, this is all done without eroding state and local rights or environmental laws.
As well, the Gas PRICE Act would require EPA to establish a demonstration project for converting coal – our most abundant domestic energy resource – into near zero sulfur content diesel and jet fuel. I am very supportive of this particular provision because it moves us toward energy independence and could create jobs in Ohio. Finally, in regard to this issue, I would like to submit a statement for the record from the National Mining Association.
Again, Mr. Chairman, thank you for holding this hearing and putting together a balanced piece of legislation. I am pleased to be a cosponsor and hope that we can join together to address this important problem.