US energy bill wouldn't lower gasoline prices

Bob Tippee

"Folks," Speaker Dennis Hastert (R-Ill.) said after the US House of Representatives passed comprehensive energy legislation Apr. 21, "it's about gas prices, gas prices, gas prices."

Well, that's malarkey, malarkey, malarkey.

It wasn't about "gas prices, gas prices, gas prices" when the House first drafted then passed basically the same energy bill in 2001-02. Gasoline then was cheap and therefore ineffective as a political lever.

Now, of course, expensive gasoline captures public attention. Lawmakers naturally try to harness the concern in service to energy legislation the White House wants them to pass despite past failures.

They shouldn't promise more than their bill can deliver.

It's true that pieces of the far-flung legislation might increase crude oil supply and encourage refinery expansion, which would tend to moderate gasoline prices. And a controversial provision would let refiners concentrate on making fuel instead of defending their bank accounts against opportunistic lawsuits. The legislation has its merits.

Overall, however, it would more likely increase than lower gasoline prices. Here's why: It would ban methyl tertiary butyl ether and require ethanol in reformulated gasoline. That combination would suppress supply and raise costs of bringing gasoline to market.

Ethanol can't extend supply to anywhere near the extent its supporters claim—if at all. It blends at lower volumes than the MTBE it displaces, requires rejection of light ends from blendstocks during summer, uses considerable amounts of energy in production, and contains less energy than gasoline.

It requires special handling and, because of high production costs, wouldn't be a fuel additive without a generous tax credit. Also, largely because of evaporative emissions, replacing MTBE with ethanol in reformulated gasoline aggravates ozone pollution in some areas and lifts prospects for more costly regulation.

Lawmakers serious about prices would not require ethanol in gasoline. Farm-state lawmakers, however, won't support an energy bill that lacks an ethanol mandate.

To many segments of the oil and gas industry, beneficial pieces of the energy bill justify a trade-off on ethanol.

But no one in the industry should join lawmakers in implying the bill would lower gasoline prices. It isn't so.

(Author's e-mail:

Related Articles

Joint venture advances plan for grassroots refinery in North Dakota

07/30/2015 Quantum Energy Inc., Tempe, Ariz., and a joint-venture partner Native Son Holdings LLC (NSH), The Woodlands, Tex., have filed a minor-source air qu...

Shell to shed Japanese refining assets

07/30/2015 Royal Dutch Shell PLC has entered a deal to sell nearly all of its interest in Japanese refiner Showa Shell Sekiyu KK to Idemitsu Kosan Co. Ltd. as...

BLM seeks comments on proposed Fidelity E&P Utah oil and gas project

07/30/2015 The US Bureau of Land Management is seeking public comments on Fidelity Exploration & Production Co.’s proposed oil and gas project 17 miles no...

BLM issues draft EA for Noble Energy’s latest DJ basin oil project

07/30/2015 The US Bureau of Land Management released a draft environmental assessment for Noble Energy Inc.’s proposal to develop as many as 89 oil wells in C...

Murkowski, Warner want US ready to use energy abundance strategically

07/30/2015 The US should better prepare itself to use its new energy abundance as a geopolitical tool by jettisoning obsolete policies and broadening access f...

Vermilion Energy farms into German acreage


Vermillion Energy Inc. has signed a farm-in agreement providing access to a nearly contiguous land block in the North German basin.

PA Resources submits Tunisian field development plan

07/30/2015 PA Resources Tunisia has submitted Tunisian authorities a plan of development for Zarat field that outlines a multiphase joint venture between PA R...

Rosneft, ExxonMobil file joint bids for Mozambique offshore contracts

07/30/2015 OAO Rosneft and ExxonMobil Corp. filed joint bids to participate in the fifth licensing round organized by Mozambique’s Institute of National Petro...

Gazprom lets contract for Russian gas processing plant

07/29/2015 OOO Gazprom Pererabotka Blagoveshchensk (GPB), a subsidiary of PJSC Gazprom, has partnered with NIPIgazpererabotka (Nipigaz), Moscow, on design and...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected