Welch Pushes Plan To Curb Soaring Gas Prices

03/14/11 5:50PM By Bob Kinzel
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(Host) Congressman Peter Welch has a plan to reduce the sky rocketing cost of gasoline in the U.S. 

But not everyone is convinced it's a good idea.

VPR's Bob Kinzel has more:

(Kinzel) In the past two months, the cost of a gallon of gasoline has jumped more than 25 percent and Congressman Welch thinks speculators in the oil market are responsible for this sudden increase.

Welch wants President Obama to release at least 30 million gallons of oil from the nation's strategic oil reserve - that's about 5 percent of the total.  Three presidents have taken this action in the last 20 years and Welch says it's had a very beneficial impact on short term gas prices.

(Welch) "The reason they went down so quickly is because it was a signal to the speculators that they may be betting against Uncle Sam and they were fearful that they would lose money on their bets rather than make money so in the past when they has been used it's actually had a very immediate impact on the price at the pump."

(Kinzel) Joe Choquette represents the Vermont Petroleum Association.  He opposes Welch's plan because he says the Reserve should be tapped only in cases of a national emergency and he argues that's not the case right now.

Choquette also doesn't buy Welch's argument about the impact of oil speculators on the price of gas.

(Choquette) "My group has never subscribed to the theory that people are simply playing the market and making a profit and getting out. We really believe that the price is set on the street to the extent that people are wiling to pay that price for barrels of wet oil that's what drives the cost of oil."

(Kinzel) There's also a disagreement about the key elements of this country's future energy policies.

Welch says it's critical to develop an energy plan that relies much more heavily on renewable sources.

(Welch) "The longer term solution is obviously energy independence in this country and that means alternative energy here in this country where we are investing in our own energy future that's renewable that's clean and that's within our control."

(Kinzel) But Choquette says that even if power from renewable projects doubles in the next 25 years, there will still be a need to tap into domestic sources and he says that can be done without hurting the environment.

(Choquette) "I think the mistakes that were made in the Gulf of Mexico are now well known and it was pretty well know that some people took short cuts there but there's plenty of knowledge in the world there's safety standards that can be deployed and we think you can explore for oil in a safe manner."

(Kinzel) The Obama Administration says it is looking at the possibility of releasing oil from the National Reserve but no final decision has been made.

For VPR News, I'm Bob Kinzel in Montpelier.

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