Gas prices averaged just more than $2.99 per gallon earlier this month in Mississippi, according to AAA. That was approximately 50 cents higher than one year ago. During an economic slowdown, this extra expense causes even more strain on family budgets, which were tight already. As we approach the summer months when prices at the gas pump usually go up, the rising cost threatens a fragile recovery.
The U.S. remains vulnerable to swings in energy prices, in part, because we lack a long-term strategic energy plan. We remain dangerously dependent on foreign energy sources, and this means fewer jobs here at home. Arbitrarily limiting American energy production to meet our needs, as the Obama Administration has done, is both short-sighted and harmful to our economy.
Volatility in the Middle East
The recent turmoil in Egypt forced oil prices higher to almost $100 per barrel. The U.S. Energy Information Agency estimates that less than one percent of the world’s oil now passes through Egypt’s Suez Canal, compared to 10 percent in 1965 when a blockade of the canal sent prices soaring. However, concerns over regional instability throughout the Middle East continue to raise expected future costs. A limited disruption of shipping through the Suez Canal could add 10 or more days to crude oil transportation times, slightly increasing costs and tying up supply. A broader slow down of production in the Middle East could send global prices skyrocketing.
Rural Areas Often Most Impacted
Changes in global energy prices have a direct effect on Mississippi families and businesses. Rural communities, especially those dependent on agriculture, frequently feel an increase the hardest. In addition, many agricultural input costs, like fertilizers, are directly related to oil and natural gas. Higher costs must be absorbed by businesses or passed along to consumers, leading to more expensive bills for everything from groceries to office supplies.
Increasing American Supply
The best way to address this problem is to produce more of the energy we need here in the United States. Following the tragic explosion aboard the Deepwater Horizon oil platform, the Obama Administration’s slow and overly burdensome oil and gas permitting process has amounted to a de-facto moratorium on Gulf Coast energy. We are importing far too much oil. The President’s continued obstruction to domestic energy exploration should end so that we can utilize our resources responsibly. To meet our needs, we should increase production from sources in the Gulf of Mexico, Western states, and Alaska.
The people of Gulf Coast states understand the delicate balance between our energy, our economy, and our environment. Recently, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), which is responsible for overseeing offshore energy production permitting, announced it was beginning the process for a five-year oil and gas leasing program. A strong effort must be made to increase America’s supply of energy.
In the future, we will rely on new fuel sources, many of which are being developed in Mississippi, but until then, oil and gas remain critical components of our energy system. Using American produced energy to meet our needs not only strengthens our energy security – it creates good jobs here at home.