Geopolitics drive gas prices, panel told

March 29, 2012 at 8:32 AM   |   0 comments

WASHINGTON, March 29 (UPI) -- Geopolitics and global energy markets are main reasons for high gasoline prices in the United States, an Energy Department official and industry analyst said.

The House Subcommittee on Energy and Power heard testimony on the cost of gasoline in the United States. The national average for a gallon of regular unleaded gasoline is nearing $4, an 18 percent gain since January.

Chris Smith, deputy assistant secretary for oil and natural gas at the U.S. Energy Department, testified that there's "no silver bullet" for short-term relief at the pump.

"It is important to remember that the price we pay at the pump is closely tied to the global price of oil," he said in prepared remarks.

The subcommittee is considering draft legislation that would tie domestic oil and natural gas production on federal lands to the authorization of a release from the U.S. strategic petroleum reserve.

U.S. Rep. Cory Gardner, R-Colo., author of the draft legislation, said suggestions about a drawdown from the SPR is a political tool used by U.S. President Barack Obama during an election campaign.

"What baffles me is that the federal government has resources to alleviate the problem but it refuses to use them," he said in a statement regarding domestic reserves.

The White House notes domestic oil and natural gas production is at historic highs, though critics note much of that is because of policies enacted by the previous administration.

James Burkhard, managing director at IHS CERA, told the panel that the key factor behind oil markets was related to geopolitical tensions with Iran.

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