Alliance Calls for Effective, Long-Term Energy Policies – Not Gimmicks – In Response to Record Gas Prices | Alliance to Save Energy

Alliance Calls for Effective, Long-Term Energy Policies – Not Gimmicks – In Response to Record Gas Prices

Release Date: Thursday, May 1, 2008

Washington, D.C., May 1, 2008 – The Alliance to Save Energy today called on the president and Congress to collaborate on “effective, long-term energy policies” that will provide urgently needed relief to American consumers suffering from record-high gasoline prices – not short-term gimmicks that only mask the underlying crisis. The Alliance said there is no quick fix to the problem of rising gasoline prices and proposed instead serious national investment in clean alternative fuels and technologies and public transportation, incentives for car pooling and telecommuting, and tax incentives for consumers who choose high-mileage vehicles.

“The sudden political frenzy over a 'summer gas-tax holiday' ignores the root causes of the current crisis in favor of a short-term gimmick that will do more harm than good,” said Alliance President Kateri Callahan. She noted that according to the Congressional Budget Office, a summer-long suspension of the federal gas tax would provide each hard-pressed consumer with only $30 on average.

“This summertime fling would be merely a detour on the true road to energy independence,” she continued. “A better gift to the American people would be a meaningful down payment on greenhouse gas reductions and long-term policies that reduce demand for gasoline and reward fuel-efficiency. Energy independence cannot be achieved by the government stepping in to, in effect, subsidize the demand for gasoline when the price gets too high — that's exactly the opposite of the signal we should be sending to oil-producing nations,” Callahan said.

“An obvious drawback of the tax holiday proposal is its price tag of $9 billion dollars in lost revenue for the federal highway trust fund,” she said, “as well as the cost to our economy as a whole and to U.S. workers from the loss of nearly 35,000 jobs in highway maintenance and construction that the U.S. Department of Transportation says result from every $1 billion in gas tax revenues.”

Callahan noted that rather than lowering prices at the pump — which are, after all, set by the oil companies — the most likely immediate effect of a gas tax suspension would be to encourage people to drive more, thereby increasing carbon dioxide and other greenhouse gas emissions.

“We cannot afford to exacerbate our air quality and climate change problems by implementing this misguided idea,” Callahan said.

Instead, she called for policies that would encourage the recent trend of lower gasoline use in each of the past four months compared with last year, as documented by the U.S. Department of Energy (DOE). “This is evidence beyond dispute that high prices discourage driving,” Callahan stated. “Further good news is that DOE projects that gasoline consumption this summer will further decline by .4 percent compared to 2007.

“That may not sound like a lot. But it is, in fact, quite significant, given that from 2002 to 2007, gasoline consumption increased annually by almost 1 percent,” she pointed out.

Callahan encouraged policymakers to heed this “healthy trend of declining gasoline consumption” by helping consumers to drive less and, when they are behind the wheel, to drive more efficiently.

In this vein, the Alliance will launch a public education and outreach initiative – the Drive $marter Challenge campaign — on May 20, together with 16 diverse partners including federal agencies, trade associations, NGOs, and businesses.

“This voluntary effort, which coincides with the start of the summer driving season, will empower consumers with information, tips, and resources on how to drive more efficiently to lower their gasoline use and costs,” Callahan said.