$2.02. That is the current national average price for regular grade gasoline in the United States. In California this week the average price for a gallon of regular gasoline is $2.27. In San Francisco, the price has hit $2.79 per gallon The New York this week average price for a gallon of regular gasoline is $2.12. In Brooklyn, the price has gone up to $2.49 per gallon. Each time our citizens pump a gallon of gasoline in their cars I want them to remember that a majority of the Senators in this body have been trying to pass comprehensive energy legislation, but they are blocked at each attempt by filibusters. Americans are feeling the effect of this Senate’s inability to pass energy legislation each time they pump gasoline into their cars. While the energy bill is not a silver bullet solution to high gasoline prices, it does set forth a plan for the future. The energy bill will increase domestic oil and natural gas production – that helps balance supply with our growing demand. The energy bill will remove the 2% oxygenate mandate - that will make it easier on refineries to make gasoline that can be traded between regional markets. The energy bill addresses the proliferation of boutique fuels –there are a number of state specific gasoline formulations that have made refining more challenging and marketing inefficient. The energy bill will promote further research in hydrogen power – that is the potential future for our transportation needs. These benefits are being denied to Americans because some folks want to kick the political football around and hope that they can score a touchdown. What they are ACTUALLY going to score is higher energy prices and higher energy prices hurt our economy. I am a football fan, but that is one touchdown I do not want to see score. Right now we are focusing on high gasoline prices. High gasoline prices are tied to the price oil. What has been making the price of oil climb? A number of factors: OPEC OPEC has been playing its production quota games. First they say they are cutting production and now they are bickering amongst themselves about whether they should increase production. The truth is those guys going to sell all the oil they can at these prices. They have a 23.5 million barrels a day ceiling, but in April their output reportedly reached 28 million barrels a day. OPEC needs to get serious about staying within a fair, reasonable price band on oil. They are risking global economic growth and their own financial future if they cannot find discipline and reliability. OPEC is meeting informally this weekend in Amsterdam before their official meeting in Beirut on June 3rd. There will be a US delegation there to communicate our position that they need to increase oil production or they will risk global economic growth. DEMAND Oil prices are affected by demand. We in the United States consume about 20 million barrels of oil a day. Demand for oil in the United States and ever growing demand in China has contributed to high prices. You know why demand is high? Because our economy is growing! If these high oil prices are sustained and continue to increase, the economic growth that President Bush has been leading us through may be harmed. Maybe those who oppose the Energy Bill think they can blame an economic downturn because of high energy prices on President Bush. They should to blame themselves for not passing the Energy Bill. I will be down here over and over reminding them that President Bush and a majority of the Senators in this body have tried to protect and promote America’s energy security with an Energy Bill. And I will also remind America of those Senators who refused to act. RISK FACTOR Another reason oil prices are where they are is the perceived risk factor. Prices are affected by the fear of attacks on oil facilities and disruptions in supply. A recent New York Times article reported that the “risk premium” on oil is ranging $4 to $8 a barrel. The Energy Information Administration has gasoline prices up mainly because of the high price of oil. So what is the solution? Well, I’ll say it again - the first step is to pass the Energy Bill. That is how we begin to improve our oil and natural gas supply demand imbalance. There are people here saying, “Oh no – high prices mean that there is market manipulation. Let’s investigate.” Repeated allegations of collusion and restraints on competition have not resulted in any major findings by a federal agency that market manipulation is the root of high gasoline prices. According to the American Petroleum Institute, almost 30 different state and federal investigations over the past decades have found no evidence of wrongdoing or illegal activity. For example, a 2003 EIA Study of the California Gasoline Price Spike does not attribute price increases to manipulation. The EIA found that the major factors that contributed to the 2003 California Gasoline Price Spike included: · The California refinery system runs near its capacity limits, which means there is little excess capability in the region to respond to unexpected shortfalls; · California lies a great distance from other supply sources (e.g., 10 days travel by tanker from the Gulf Coast), which prevents a quick resolution to any supply/demand imbalances; · The region uses a unique gasoline that is difficult and expensive to make, and as a result, the number of other suppliers who can provide product to the State are limited. EIA’s California Gas Spike conclusions can be generalized to the national level as well – tight supplies, increased demand, limited refinery capacity and stringent environmental regulations are major contributors to high gasoline prices. I will tell you who else I think is a major contributor to these high gasoline prices –Senators who are blocking passage of the Energy Bill.