Like many Ohioans, I experienced sticker shock today when I filled up at our neighborhood gas station outside Cincinnati. Regular unleaded was $3.79 a gallon. Some Ohioans are already seeing gas prices over $4 per gallon, and higher prices may be on the horizon. This makes it more expensive to commute, drive to the store or take a vacation.
Because oil fuels every major sector of our economy, rising gas prices have a less visible, but no less costly, impact on all of us. According to the U.S. Department of Transportation, 94 percent of all consumer goods and 68 percent of all farm goods are transported over America's roads. As the cost of shipping and producing goods increases, we will find ourselves paying more for everything from groceries to electronics.
Oil prices are on the rise for a host of reasons. As the global economy slowly recovers, demand for oil is rising to meet new manufacturing and other needs. The laws of supply and demand kick in. Unrest in the Middle East and North Africa, including oil-rich Libya, has also injected uncertainty into the energy markets, which results in price hikes. Some experts also suggest that the oil market is factoring in expected inflation due to global deficit spending, especially the record federal government debt in the United States.
Still others point to the actions of speculators and their illegal actions driving up the cost of oil. The Obama Administration recently announced the formation of a new task force to look at fraud and manipulation within oil and energy markets. Any price fixing or other illegal activity should be prosecuted. But I don't think we need a task force to tell us what we need to do as a country to respond to yet another spike in oil prices: we need to move aggressively to get away from our dependence on foreign oil and this must include using more of our own resources.
For decades, Washington, D.C., has been unwilling to tap the energy resources in our own backyard. This policy simply makes no sense in the world's largest oil-consuming nation. The United States today consumes about 22 percent of the world's oil supply - much of it from countries hostile to American interests and ideals. Last year alone, we spent $337 billion on oil imports, more than half of what we spent on our nation's defense, and we have not been self-sufficient in energy production since 1970.
There is a better way to power America's economic future. What we need are common-sense solutions to strengthen U.S. energy production. That begins with harnessing the potential of our own natural resources in an environmentally responsible way. As an immediate bridge, we should increase access for oil exploration and production in energy-rich areas of the country like the Outer Continental Shelf, and in parts of Alaska. This will create jobs, drive investment, and immediately reduce our dangerous dependence on foreign oil.
We must also look to alternatives to oil, recognizing that true innovation will come from private-sector entrepreneurs, engineers, and scientists - not from the Washington bureaucracy. That's why it is critical to eliminate unnecessary rules and regulations that slow the development of cleaner, more affordable energy. Less red tape will free businesses to grow, innovate, and create new jobs.
The good news is that Ohio is poised help lead America's energy future.
Ohio has a long history of producing its own energy sources, with an oil, gas, and coal business that pre-dates the Civil War. Today, Ohio is preparing for a natural gas "shale revolution" - a new means of tapping energy-rich underground rock formations. Considering the potential of the Marcellus and Utica Shale Formations, we have the possibility of creating good Ohio jobs while providing Ohioans with access to large quantities of cleaner-burning natural gas that can be used today for buses, taxis and other fleets and could be used for cars in the future. Where natural gas is used for transportation fuel today, the average cost per gallon is less than $2.
These new breakthroughs in Ohio energy production can build on the longstanding strength of our Ohio coal industry. Coal is a proven source of relatively inexpensive energy that supports thousands of jobs across Ohio. Clean coal technology continues to develop, and, with the help of research being done at Ohio's Wright-Patterson Air Force Base, coal-to-liquid could become another affordable domestic alternative to oil.
Ohio also continues to be a leading producer of bio-fuels. We currently have five operating plants, producing 424 million gallons of ethanol annually and contributing hundreds of jobs and millions of dollars of economic activity to Ohio's rural economy. Research and new cellulosic ethanol technologies are making home-grown Ohio bio-fuels more cost-effective and should be encouraged through further research and investments. Ohio is also a leader on fuel cell research and other clean technologies to power the cars of the future.
As these examples show, America has the know-how and the natural abundance to move toward a future of energy independence. But we must make the right choices today. It is time to unleash the ingenuity of our workforce and the potential of our energy resources to power the American economy and create new jobs - with Ohio leading the way.
Rob Portman represents Ohio in the United States Senate.