The Washington Times – Tuesday, January 11, 2011

With gasoline prices at unusually high levels for this time of year, a report from a presidential commission Tuesday did little to break the political deadlock over offshore drilling, prompting some observers to warn that the United States is headed toward another gas-price crunch this summer.

The nationwide average price of regular gas over the weekend rose to $3.08 a gallon while crude-oil prices have surged to more than $90 a barrel — levels seen in only one previous winter, in 2007-08. Gasoline prices then ran up dramatically in the 2008 spring-summer driving season and reached an all-time high of more than $4, prompting public outrage and demands that the government open offshore drilling for the first time in 30 years.

But despite the threat of much higher gas prices again this summer, the momentum for increased drilling has been effectively snuffed out by the disastrous Macondo oil spill in the Gulf of Mexico last year. The Obama administration has withdrawn most of its proposals to expand drilling off U.S. coasts and has imposed more layers of regulation that have stifled new development even in the well-pocked Gulf of Mexico.

Tuesday’s report from a commission appointed by President Obama to investigate the oil spill blamed it on “complacency” within the industry and the government bureaucracy that regulates drilling, and mostly ratified the administration’s moves toward heavier regulation.

That prescription keeps the White House and most Democrats in Congress on a collision course with the oil industry and conservatives in the Republican-led House, who warn against regulatory overreaction and say it will lead to higher oil and gas prices.

David Holt, president of the Consumer Energy Alliance, an activist group pushing for more drilling, said the commission failed to help break the gridlock over the critical issue of dwindling energy supplies in the U.S.

“This commission had an opportunity, and some might even say a mandate, to move the current energy debate past politics and toward a reasonable consensus on the best and safest way to allow Americans continued access to the energy resources they own offshore,” he said.

But the recommendations for tighter regulation will have the effect of “shutting down” drilling, rather than enabling producers to access oil reserves in a safer way, he said.

“Consumers should be very concerned that the price of oil crossed the $90 threshold in the month of January,” said Richard Moskowitz, vice president of the American Trucking Associations, also expressing disappointment with the report. “Absent a rational change in domestic energy policy, we are concerned that the price of oil will continue to climb and have a dramatic and negative effect on our already struggling economy.”

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