Senator Murkowski Advocates Diversification and Opening ANWR to Alleviate Escalating Gasoline Prices

SENATOR MURKOWSKI ADVOCATES DIVERSIFICATION AND OPENING ANWR TO ALLEVIATE ESCALATING GASOLINE PRICES

Sen. Lisa Murkowski today called for industry and government to come together to address ever increasing gas prices in the wake of Hurricane Katrina.

"Right now, Americans are paying $288 million a day more for fuel than we did at this point last year," Murkowski said during an Energy and Natural Resources hearing examining rising American gas prices. "We're paying a billion dollars more than we did three years ago. This is and will continue to affect more than the gas pump. It is affecting everything we do and how this country operates," she said.

The rise in gas prices following Katrina--the national average reached $3.06 over the Labor Day weekend--has resulted in large part due to a reduction in Gulf region refinery capabilities. In her statement, Murkowski pointed out that Congress acted to encourage more refineries be constructed in the recently signed energy bill. However, Murkowski also noted that Hurricane Katrina has illustrated the danger of having large percentages of the country's production and refinery capabilities centralized in one area.

"We have 29 percent of oil coming out of the Gulf region and 21 percent of our gas. As a result of Katrina, 10 percent of the nation's refining was shut down because of one incident and we're just at the beginning of the hurricane season. What happens if there are more storms or labor unrest overseas? We need to do more to diversify our domestic resources, and that means ANWR. Especially now, we have to think about what another million barrels of oil a day would mean for the country's energy outlook."

Murkowski asked witness Guy Caruso of the Energy Information Administration what the short term outlook for gas and home heating oil prices looked like, given current circumstances.

"In your comments you indicated that in the third quarter we're going to see a reduction and then by 2006 an average of $2.40. Yet, there are things on the horizon that seem to make the outlook bleaker. Our constituents want to know when the price of gasoline is going down," Murkowski said.

Caruso answered that the estimated third quarter reduction and $2.40 average was based on a mid-case scenario for effects on gasoline pricing. Caruso also indicated that home heating oil is expected to increase 30 percent this winter over last winter.

http://murkowski.senate.gov/pressapp/record.cfm?id=245412