For those of you battered by a brutal -- and very snowy -- winter, the good news is that spring is around the corner and summer is just three months a way.
The bad news is that the potential for $4 a gallon gas is also growing closer. Yesterday the Department of Energy released its revised outlook for the price of gasoline, in which it said there is a 25 percent chance gas could hit or top $4 during the summer driving season.
With rising crude oil and gasoline prices, the Obama administration is looking for ways to ease some of the pain at the pump. One idea floating around is to release some of the stockpiles from the Strategic Petroleum Reserve, which currently holds 727 million barrels of oil -- enough to supply the U.S. for 37 days, USA Today reports.
But many argue that the run-up in gas and oil prices has nothing to do with supply and demand. (See: $200 Oil Is a "Totally Exaggerated" Forecast, Says Energy Analyst Gheit)
"Releasing petroleum stocks from the Strategic Petroleum Reserve isn't going to do anything to reduce prices," says Tyson Slocum, director of Public Citizen's energy program, who believes rising oil prices are due to speculators and the bank lobby (See: $100 Oil? Blame Speculators and the Bank Lobby). "There are no supply shortages of oil in the United States" and in fact "refiners in the United States are operating at well below capacity … because demand for gasoline continues to be fairly anemic in the U.S.," he says.
For the same reasons, he says expanding offshore drilling isn't going to help either. He points to a report done during the Bush administration that found opening up more drilling wells would have a negligible impact on gas prices in the U.S.
"The United States sits on a tiny reservoir of oil," he tells Aaron in the accompanying clip. "We are not Saudi Arabia. We cannot open up the spigots and tap into huge reserves that immediately result in large increases in daily production."
Slocum says a better solution would be to give consumers more tools to help them be better prepared for ever-rising energy prices. He suggests repealing the tax credits for oil companies and instead directing that money to consumers to help them buy new energy efficient technologies, like hybrid cars.
Public Citizen also advocates for windfall taxes on oil profits. For more, watch the interview.
Do you support end to big oil tax credits to instead help consumers?
- Strategic Petroleum Reserve