There is no one single solution to solving the fuel crisis. Many strategies must be explored in order to best meet the needs of the millions of consumers and businesses that are currently being hampered by the high price of fuel.
American Trucking Assns. (ATA) senior vp Tim Lynch testified last week in front of the House Committee on Agriculture and asked the Federal government to implement a comprehensive plan to help ensure an affordable fuel supply for the nation’s 3.5 million truck drivers as well as American consumers.
“The fuel crisis we face today is severe,” Lynch said. “There is no one single solution to high oil prices. We need to conserve fuel and increase oil production to emerge from this crisis. But neither of these in itself is a total solution. Congress must embrace a multifaceted approach to solving this problem.”
ATA believes the federal government can alleviate trucking companies’ hardships by reducing overall demand for oil and increasing domestic oil supply. The methods of doing this include establishing a national diesel fuel standard; allowing environmentally responsible exploration of currently off-limit areas in the U.S. that may be oil-rich, and allowing environmentally responsible development in Colorado, Utah and Wyoming oil shale and tar sands.
In addition, ATA is calling for further funding of EPA’s SmartWay Transport Partnership Program; streamlining EPA’s regulatory framework for additional refinery operations applications; requiring speed limiters be set at 68 mph or lower on all new trucks; setting a national maximum speed limit of 65 mph; suspending the 12% federal excise tax on motor carrier’s purchases of auxiliary power units (APUs), and requiring states to grant a weight exemption for APUs.
“I’m personally very skeptical on many of these patchwork solutions,” Eric Starks, president of FTR Associates, told FleetOwner. “Does it fundamentally change the equation? I don’t think so.”
According to Starks, because many of these suggestions don’t address speculation or supply and demand, they may bring fuel prices down a few pennies, but there just isn’t enough oil in the United States to meaningfully pull down prices.
The United States needs demand to continue falling, although countries such as China and India are sucking up more energy, with China in particular planning to build millions of vehicles over the next few years, Starks said.
“The industry needs the volatility to go away,” Starks said. “That is what’s killing them. It can’t be absorbed.”
ATA’s Lynch asked Congress to make petroleum markets transparent and free from excessive speculation and manipulation, cutting petroleum demand and expanding the petroleum supply. The trucking lobby has asked Congress to consider expanding government oversight of all electronic petroleum exchanges, requiring the U.S. Commodity Futures Trading Commission (CFTC) to establish position limits ensuring adequate liquidity.
According to Lynch, the current price of petroleum is not driven purely by supply and demand, and excessive speculation may be a factor leading to rapid oil price increases. ATA hopes increasing petroleum market transparency and adopting reasonable position limits would hinder speculation.