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Executive Summary
Environment America is the new home of U.S. PIRG's environmental work.
Every Memorial Day weekend, families and friends pile into their cars and drive
to the beach, national parks, and other popular tourist destinations. This Memorial
Day, with gas prices soaring above $2 per gallon in some parts of the country,
consumers will pay more for these weekend trips than in years past.
Politicians at the federal
level are putting the blame for rising gas prices on everything from the Organization
of Petroleum Exporting Countries (OPEC) to fuel additive requirements. While
OPEC clearly plays a role in determining gas prices, this finger pointing overlooks
the fundamental problem: America is too dependent on oil. As long as demand
for oil continues to climb, consumers will remain vulnerable to price spikes
at the gas pump—whatever their cause.
In 1975, in response to
the oil embargo, Congress passed the Energy Policy and Conservation Act to increase
automobile fuel economy standards, protect consumers from high gasoline prices
and reduce our dependence on foreign oil. The law recognized that the only way
to reduce foreign oil dependence was to reduce U.S. demand. It requires that
the National Highway Traffic and Safety Administration (NHTSA) review and increase
automobile fuel economy standards as technologically feasible. Although the
technology does exist to safely increase automobile fuel economy standards to
40 miles per gallon (mpg) in the next 10 years, NHTSA has not enacted a meaningful
increase in fuel economy in almost three decades.
As a result, this holiday
weekend, Americans will be paying more at the gas pump and using more foreign
oil than they should be, given technology available today. Specifically:
• Americans will pay
almost twice as much at the gas pump—$72 million more—this Memorial
Day weekend than they would with a 40 mpg fuel economy standard;
• Americans will use
35.7 million more gallons of gas than they would under a 40 mpg fuel economy
standard; and
• Americans will consume
1.8 million more barrels of foreign oil this Memorial Day weekend than they
would with a 40 mpg fuel economy standard.
The Bush administration
should be looking for ways to save consumers money at the pump and wean us from
oil—foreign or domestic—in the long term. Instead of taking advantage
of automobile technology to achieve a 40 mpg standard, the administration is
pushing an energy policy that emphasizes the technologies of yesterday and has
opposed all meaningful increases in fuel economy. In fact, the administration
has proposed new fuel economy standards that would make it easier for gas-guzzling
SUVs to get even fewer miles per gallon.
While consumers continue
to pay more at the pump, oil companies are recording huge profits. In 2003,
the top five oil companies enjoyed net profits of $60 billion. Meanwhile, the
Bush administration has done nothing to protect consumers from oil company mergers
and instead has pushed an energy policy that rewards the oil industry with taxpayer-funded
subsidies and tax breaks.
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