Gasoline Price to Top $3 Again
Posted on: Tuesday, 3 January 2006, 15:00 CST
By Doug Abrahms Gannett News Service
WASHINGTON -- Gasoline prices have dropped 80 cents a gallon since their summer peak, but motorists can expect to see prices spike above $3 a gallon again in the coming months.
"You're going to see much higher gas prices," said Tom Kloza, a gas analyst at Oil Price Information Service. "Many, many parts of the country will see over $3."
Energy was a major story in 2005, especially after two major Gulf Coast hurricanes shut down part of the nation's oil and natural gas wells and refineries last summer. The storms drove gas prices above $3 a gallon nationwide for the first time. Parts of the South even saw gas shortages.
Energy likely will remain a front-page topic this year and next because it is difficult to supply enough energy to match America's consumption of gasoline and heating fuel. Meanwhile, the United States is doing little to increase supply or decrease demand.
The major energy bill Congress passed in 2005 included no provision to open up large-scale United States oil or gas fields or require that vehicles become more fuel efficient.
Gasoline prices, electricity costs and heating bills are expected to rise even higher in 2006 than last year's record-setting rates, according to the Energy Information Administration.
"We seem to move from one tight situation to another tight situation," said Howard Gruenspecht, the agency's deputy administrator.
Energy experts' immediate concern is high-priced natural gas, which is jacking up heating bills from California to Maine. The Alabama utility commission asked local gas companies in December not to raise their prices any further after increasing residential rates 37 percent in October.
"The bills that people got this month were twice as high as the bills they got in the same month last year," said state Rep. Alvin Holmes, a Democrat.
Many low-income people cannot pay their heating bills and could be cut off this winter because the state doesn't prohibit utilities from disconnecting customers during cold months, Holmes said.
In Washington, Congress remains divided over how to solve the problem. Lawmakers adjourned for the year without increasing funding for a federal program to help low-income people pay heating bills.
Most Republicans, the Bush administration and energy companies want to expand supplies and continue to push for increased oil and natural gas drilling in the Rocky Mountains and coastal waters off Florida. They also want to open Alaska's Arctic National Wildlife Refuge to drilling.
About 10 billion barrels -- enough to fully supply the United States for more than a year -- could be pulled from the refuge to help lower gasoline prices, said Red Cavaney, president of the American Petroleum Institute, which represents oil companies.
"These (high prices) are the results of policies that elected leaders have chosen," he said. "The consumer is paying the price."
The debate over drilling in the refuge is decades old, and the Senate voted down yet another proposal at the end of December.
Environmentalists and many Democrats have urged lawmakers to instead pass legislation requiring the nation's automakers to build more fuel-efficient cars, but Congress repeatedly has scuttled such proposals.
A bipartisan group of lawmakers introduced a bill in November to cut oil usage 10 percent by 2025 by providing incentives for building more alternative fuel cars and electric-gasoline hybrid vehicles and requiring higher fuel standards for tractor-trailers.
Proposals that focus on cutting demand are also being pushed by Set America Free, a coalition of groups led by political conservatives worried about the nation's dependence on imported oil.
Gal Luft, a member of the coalition, said the energy bill Congress passed focused on "things that are way over the horizon and will not do anything to alleviate the situation today."
"I don't see any indication that any of the parameters of the (energy) problem will get better next year," he said.
On the Web:
www.eia.doe.gov, Energy Information Administration.
www.setamericafree.org, Set America Free.
www.api.org, American Petroleum Institute.
Source: Deseret News (Salt Lake City)
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