Our Vision

Building an America where freedom, opportunity, prosperity, and civil society flourish.


BannerWingLeft Become a Member Today BannerWingRight


Should the Government Impose Higher Gas Prices?

President Obama’s oil spill commission will release its long-awaited final report this morning, recommending new government regulations and limits on drilling. These conclusions could shape the future of the oil industry — and impact our nation’s energy policy for years to come.

The commission’s primary focus was determining the cause of the spill. Last week it revealed that errors by BP, Transocean and Halliburton contributed to the blowout of the Macondo well, resulting in the deaths of 11 people and the worst spill in history.

But the commission’s members have decided to go a step further. The anti-drilling measures recommended in their report would take America in the wrong direction. This shouldn’t come as a surprise. Obama picked five members who lack expertise in drilling and have a history of donating to Democrats. One member leads the Natural Resources Defense Council.

Expect liberals to seize on the report to condemn the industry as a whole and renew their attacks on offshore drilling. But the fact is that mistakes of individual actors should not result in punishment for an entire industry.

The American people deserve better. With energy needs on the rise — and gas prices inching higher — now is a time for solutions. The first step is putting an end to the Obama administration’s anti-drilling policy in the Gulf of Mexico. Just two new deep-water permits have been issued since the politically motivated moratorium ended three months ago. That’s down 88 percent from the historical average. Shallow-water permits, which weren’t even subjected to the moratorium, are down 11 percent.

Ongoing delays in the Gulf of Mexico are only part of the problem, however. Offshore drilling bans currentlyprevent exploration in about 85% of our coastal waters. Those bans are crippling job creation and making America more reliant on foreign sources of oil.

Unfortunately, they were recently reinforced by the Obama administration. The Interior Department announced last month that the eastern Gulf of Mexico and the Atlantic and Pacific coasts would be off limits for the next seven years. That news came after the administration canceled four pending lease sales in Alaska.

The oil industry has much to contribute to America’s energy needs — particularly in light of rising gas prices. The American Petroleum Institute, in its “State of American Energy” report, estimated the industry supports more than $1 trillion in annual contributions to the U.S. economy. Creating additional access to areas currently closed to development would lead to even more domestic production, new jobs and billions in government revenue.

Yet the administration’s actions are having the opposite effect: The lack of exploration and production means fewer jobs for out-of-work Americans and less money flowing into federal coffers.

For the first time since 1959, the United States could go an entire year without a lease sale. That means the loss of more than $1 billion in bonus bids, less revenue from rental payments and significantly fewer royalties. State governments, already grappling with fiscal problems of their own, could forfeit upwards of $100 million in tax revenue, according to Louisiana State University finance professor and economist Joseph Mason.

In addition to its anti-drilling recommendations, the commission will also suggest reforms to the offshore oil and gas liability regime. In the wake of the spill, The Heritage Foundation proposed a liability and claims process that assigns risk of offshore oil and gas operations, compensates victims and protects companies from frivolous lawsuits.

With renewed attention on energy issues, now is the time for Congress to abandon policies and regulations rooted in Washington that lead to higher gas prices, energy shortages and job losses. Instead, lawmakers should turn their attention to common-sense solutions that focus on the free market and entrepreneurial spirit of the private sector.

Quick Hits:

  • Asked by Keith Olbermann if he could provide any details on the actual law enforcement investigation of the Arizona shooter, Sheriff Clarence Dupnik said: “I’ve spent all my day dealing with the media as I did yesterday so I really haven’t had an opportunity today to get into that kind of detail.”
  • To an extent rarely seen in recessions since the Great Depression, wages in this recession have taken a sharp and swift fall.
  • Pursuant to Obamacare, federal regulators will decide what benefits health insurers will and will not cover.
  • Chinese Minister of Defense Liang Guanglie said Monday, that it was up to the United States to change its policies if it wants better ties with China’s military.
  • Is America economically free? Find out tomorrow when The Heritage Foundation releases its 17th annual Index of Economic Freedom in partnership with The Wall Street Journal.

Other Questions