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Last Updated: Jun 17, 2008 - 11:23:10 AM 

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Michael Michaud

Let's be Honest about Gas Prices
By Representative Mike Michaud
Jun 17, 2008 - 11:15:24 AM

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Representative Mike Michaud represents Maine's 2nd District in the United States Congress.
I believe that it is long past time that politicians in Washington are honest with the American people about rising gas prices. Much of the increase that we've seen is attributable to a substantial increase in demand for petroleum products in rapidly developing countries like China and India. For the first time in their history, a true middle-class is being developed in those countries. And like families in the United States, many of these families abroad want to buy cars and live with other modern conveniences.

This sounds like basic supply and demand economics. But let's be real. Supply and demand cannot explain the doubling of gas prices in just 3 years and the increase of about a dollar that has occurred just since the beginning of this year. It is just not reasonable. Clearly there are other factors at play.

The current situation in the Middle East is certainly not helping things. Despite the promises given to us by the Administration of a more stable Middle East, this region of the world is rife with violence and unrest. Iran has been strengthened and is more threatening to its neighbors than it ever was in recent memory. Finally, progress towards peace between Israel and the Palestinians remains unresolved.

Other regions of the world that serve as our sources of oil have also seen a rise in violence and terrorism, much of it directed at oil infrastructure like drilling platforms and pipelines. Add to all of this the fact that oil is a finite and non-renewable resource, which means in the long run we will see oil prices that climb rather than fall.

My call for a dose of honesty in Washington runs contrary to the promises being made by some, but I think that it is important. In reality, there is very little that our government can do to drastically lower gas prices in the short term. But, there are steps we can take to relieve the pressure of rising fuel prices on America's families, our elderly, and those that are struggling to keep their lives and businesses afloat. There are steps we can take to eliminate manipulation and runaway speculation in the energy markets. And, finally there are steps we can take today that will reduce our dependency in the long term on a fuel source that is limited and in too many instances in the hands of those that don't wish us well.

Congress passed legislation to suspend shipments to the Strategic Petroleum Reserve to help increase supply. Congress has also passed an energy measure which prohibits oil companies from engaging in market manipulation or providing false information about prices in the wholesale petroleum markets. We have passed a law which sets out new fuel economy, building and appliance efficiency standards. And we have started to close the so-called "Enron Loophole," which allows energy speculators to run up the price of oil with little or no oversight. But more needs to be done to truly crack down on off-market energy speculators.

Ending shipments to the strategic petroleum reserve alone could reduce gas prices by 5 to 24 cents a gallon. Reeling in out-of-control speculators should add even more relief. And positive steps taken today toward conservation and renewable energy will allow our country to become more energy efficient and independent, resulting in more stable energy prices in the future.

But the reality of high fuel prices is upon us. They not only affect drivers, they also affect home heating fuel. I have long been an advocate for the Low Income Home Energy Assistance Program. I have constantly fought for funding of this program at $5.1 billion, the program's maximum authorized spending level. Unfortunately, funding for this program has traditionally been set at a little over $2.5 billion, with the president's annual requests coming in at even less. I will continue to fight to ensure that this program reaches as many people as possible with as much help as possible. This winter it will be more important than ever before.

We also need to establish an equitable truck weight policy in America, one that does not place Maine at a competitive disadvantage or force heavy trucks through Maine's downtowns. Such a change would help our truckers stay in business by saving on fuel and decrease their carbon footprint.

And finally, we need to pass the tax extenders package, a bill that provides for ongoing tax relief for middle class families and the extension of tax credits for renewable energy.

In my column next week, I will continue this dialogue with you on the need to restore honesty in the energy debate and where things are in Washington. It's time to replace rhetoric with action, deliver relief to Americans, and plan for our energy future.


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