While the price of gas can change, the needs of Minnesotans stay the same. People still need to get to work, businesses still need to transport their goods to market and farmers still depend on diesel fuels to harvest their crops.
Volatile swings in gas prices put Minnesota’s prosperity at risk. The effects are far-reaching, impacting family budgets and business’s bottom line and placing a hurdle in front of our recovering economy.
This spring Minnesota saw the price of gas jump 40 cents in one week and climb to a record $4.27 a gallon, a full 65 cents above the national average. While prices have since dropped from those sky-high levels, action is needed to prevent the next spike in gas prices.
We now know what caused the increased gas prices this May, and it wasn’t the usual suspects. It wasn’t movement in the price of crude oil, it wasn’t turmoil in the Middle East, and it wasn’t a natural disaster. Instead, the culprit was simultaneous maintenance on several refineries that serve the Upper Midwest. This caused a gasoline shortage in the region and drove the price in Minnesota to the highest in the nation.
While refineries must perform necessary upgrades to protect worker safety and repair equipment, there is no reason routine maintenance should result in a major gasoline shortage that puts Minnesota’s economy in jeopardy.
That’s why, in addition to contacting the oil companies to seek immediate relief last May, I introduced legislation to address the refinery closure issue. My bipartisan bill would require refineries to report to the Energy Information Administration any scheduled maintenance that might bring their operations off line and require refineries to give immediate notification of any unplanned outages.
This information can serve as an early warning system to protect consumers from production problems within the refinery industry. With more transparency and more lead time, the Energy Information Administration can work to make sure scheduled refinery shutdowns don’t send gas prices skyrocketing.
The bill would also ask the Secretary of Energy to look at the potential for additional refined fuel storage capacity in our region. Minnesota has less storage capacity for refined products than other parts of the country, making us more vulnerable to the kinds of refinery outages we’ve experienced this year, both planned and unplanned.
The recent price spike highlights the stubborn problem of our country’s reliance on foreign oil. We have made strides in recent years reducing our dependency on foreign liquid fuels from 60% to 40% in large part because of increased production in North Dakota as well as better gas mileage vehicles and an increased use of homegrown biofuels, yet people and businesses are still clearly vulnerable to increases in gas prices.
In addition to the refinery issue, we also need to crack down on the out-of-control oil speculation on Wall Street. We can attribute an average of 56 cents per gallon increase in gas prices to excessive oil speculation. I am committed to pushing regulators to hold these oil speculators’ feet to the fire and help give families some relief at the pump.
Most importantly, America needs an all-of-the-above energy agenda. One that continues to support domestic drilling in places like North Dakota, works to develop the next generation of biofuels and other alternative energy sources, and maximizes every gallon of gas through more fuel efficient vehicles on the road. Through these innovations, we can increase our energy independence and restart the economic engine that has always kept our country moving forward.
In many ways, the spike in gas prices this spring was déjà-vu all over again. It is time to break that cycle and get serious about developing long-term energy solutions that will strengthen our economy and build the next generation of energy innovation.