The Wrong Approach to High Gas Prices

Here’s the wrong way to try to lower the price of gas: blocking loans that would help develop more efficient cars. American companies looking to develop cleaner cars are not receiving the loan support they need. The short-term consequence is the shutting down of factories and the loss of jobs. The long-term consequence is that we will still be at the mercy of oil companies and foreign countries and the wide fluctuations in gas prices that accompany that dependence for years to come.

In 2007, in conjunction with new federal fuel economy requirements, the Department of Energy created the Advanced Technology Vehicle Manufacturing program, ATVM, to provide loans for the development of more fuel-efficient vehicles. So far, only $8.4 billion of the $25 billion authorized by Congress has been allocated. Many companies have been strung along for years and are starting to falter. Last month, Bright Automotive, an Indiana company looking to build energy-efficient fleet trucks, shut down and laid off all 60 workers. Bright’s business plan had been endorsed by major companies with large gas-guzzling fleets, like Frito-Lay and Comcast. It had also received advanced orders for its trucks.

It seems the DoE is still stinging from the Solyndra bankruptcy and implementing overly restrictive protocol, but preventing clean technology from developing is the wrong lesson to learn. As we’ve highlighted extensively, government investment in clean technology development is not only a good thing, it’s the right thing. Investing in start-ups so they can develop technology that will then be commercialized is not only a smart use of resources, it is fundamentally necessary because there is no private incentive for certain benefits, like environmental protection.

Blocking clean energy loans is not going to help decrease gas prices. Nor will approving the Keystone XL pipeline or opening up every area to drilling. Beyond not increasing our oil supply in the short-term, a new report from Cornell’s Global Labor Institute shows the significant negative economic impacts of tar sands spills. The report highlights how tar sands pipelines had three times the number of spills than conventional crude oil in 2010 alone. The most expensive cleanup was near the Kalamazoo River and cost over $700 million to clean up.

On top of all this, recent polling shows that 66 percent of people polled blamed oil companies and Middle East nations for high gas prices and 51 percent said that government investments in infrastructure, education and alternative energy will create jobs. Forty-six percent said expanding development of alternative fuels and promoting conservation were the single best way for the U.S. to reduce its dependency on foreign oil. These numbers show strong support for investing in alternative energy and alternative fuels so why is it not happening?

I’m sounding a little bit like a broken record here, but the fact remains there is no easy fix for high gas prices. Blocking clean technology development and building a dirty pipeline are not going to cut it. The American people get this, why don’t our decision-makers?