Merkley Announces New Plans to Lower Gas Prices, Provide Families with Real Relief

Gas Prices Cost Oregon Families $660 More This Year

For too long big oil companies and oil sheiks have set the agenda in Washington D.C. and now Oregon families and businesses are paying the price. Oregon families and businesses will spend more than $660 on average for gasoline this year than they did in 2007[1].

Republican Senator Gordon Smith has taken more than $300,000 in campaign contributions from oil and gas interests, while delivering $18 billion in tax giveaways for oil companies and opposing measures to end Wall Street speculation of oil companies. [Center for Responsive Politics, FEC Reports; Senate vote #69, 4/2/98; Senate vote #289, 9/23/99; Senate vote #456, 11/21/03; Senate vote #67, 4/7/04; Senate vote #332, 11/17/05; Senate vote #222, 6/21/07; Senate vote #184, 7/25/08]

House Speaker Jeff Merkley, candidate for U.S. Senate, announced new plans today to relieve the pain for families and businesses by providing immediate help to consumers.

Merkley's Plan to Lower Gas Prices, Relieve Pain for Consumers, End American Dependence on Foreign Oil

1. Take immediate steps to close the "London loophole" and end excessive speculation

Last week Republican Senator Gordon Smith sided with Wall Street speculators and against lower gas prices, standing with Republicans to kill legislation that would lower gas prices now by curbing excessive speculation in energy markets. Smith voted to protect the "London Loophole," which allows U.S.-based trading of American commodities on nominally foreign markets that are not subject to American regulation. Speculators have used this loophole to evade accountability and oversight, driving up the price of oil in order to profit off American consumers.

Merkley will immediately close the "London Loophole," so all U.S.-based trading of American commodities is subject to American regulation. He will also require all energy trading to take place on regulated exchanges, as is the case for food commodities. This step would ensure that speculation limits - caps on the amount of oil hedge funds and other institutional investors can trade - can be enforced and that markets reflect actual supply and demand, not the investment priorities of Wall Street speculators.

2. Provide direct, immediate relief to families and businesses now

Merkley will provide direct financial relief to low income and middle class families and small businesses who are being squeezed by record gas prices. By closing tax loopholes and recovering lost royalties from oil companies, we can provide families struggling with the increase in fuel prices with a rebate check. Merkley's proposal, based on a plan from the Center for American Progress, will provide relief checks of up to $450 to 80% of families.

This plan would also create new tax credits to help small businesses with auto and truck fleets. With gas prices skyrocketing, more than 300,000 self-employed truck drivers are forced to spend over $110,000 annually on fuel. Each independent truck driver could receive $4,000, or about five percent of the increase in fuel costs during the Bush Administration.

3. Increase domestic production and supply, forcing oil companies to "Use It or Lose It"

Merkley will pursue "Use It or Lose It" legislation to force oil companies to use the drilling permits they have on 68 million acres of public lands and ocean floor or face losing them. Merkley will also work to reinstate a ban on the export of Alaskan oil to foreign countries, so that American oil benefits American consumers.

Merkley is also proposing the sale of 500,000 barrels of oil per day for six months from the Strategic Petroleum Reserves (SPR) to increase the domestic supply of oil and lower prices. This move would still leave the SPR 85% full and would generate approximately $9 billion that Merkley would use for generous tax credits for consumers who purchase cars that exceed 50 miles per gallon.

4. Make major investment to end America's dependence on foreign oil, expanding production of renewable fuels, fostering new research into cellulosic ethanol, and increasing fuel efficiency

To break American dependence on foreign oil, we must accelerate the development of new technologies. Merkley will make an immediate major investment into research and production of renewable fuel. Merkley's investment will speed up research into cellulosic ethanol, which has the potential to create thousands of jobs in rural Oregon. Cellulosic ethanol, which can be made from a variety of agricultural byproducts, wood waste, and even algae, is not only more energy efficient than corn-based ethanol, but can be produced without disrupting food commodity markets.

Merkley will also provide incentives to improve fuel efficiency and bring electric battery-powered cars into immediate production. Four automakers are already planning to put plug-in hybrid cars on the market in 2010. These cars, which can be charged from an ordinary wall socket, but run on traditional auto fuels as their batteries run down, can get close to 100 MPG. Merkley will advocate for a new tax credit to not only offset the higher cost of these cars, but make them comparatively less expensive.

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[1] Based on monthly averages for Oregon gas prices from the Oregon Department of Transportation and AAA and fuel efficiency averages from the U.S. Department of Transportation's Bureau of Statistics.

Posted July 29, 2008
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