Truckers feel pump pain as Obama unveils energy policy

Truckers feel pump pain as Obama unveils energy policy    Oil prices are wreaking havoc with motor carriers' cash flow and their cost structure, Davie Osiecki, senior vice president of policy and regulatory affairs at the American Trucking Associations, said Tuesday.
   In a presentation to the National Industrial Transportation League's spring policy conference near Washington, he said the trucking industry is expected to spend $136 billion this year for diesel fuel to run its vehicles, up $34 billion from last year.
   Oil has traded at just below $105 per barrel in recent days, compared to the $75 per barrel range it was at a few months ago.
   The trucking industry will likely spend about $142 billion for diesel next year, Osiecki said.
   Diesel price increases have nearly mirrored those for oil. The average price for a gallon of diesel fuel is $3.90, according to the U.S. Energy Information Administration. Seven weeks ago the price averaged $3.51 per gallon and last November diesel averaged $3 per gallon nationwide.
   The price is still below the peak of $4.70 per gallon that occurred in 2008.
   Truckers are exposed to sharp run ups in fuel prices because surcharge mechanisms that pass cost increases onto customers often lag by several weeks.
   The ATA supports more domestic production to increase supply, including drilling on the Outer Continental Shelf and the Alaska National Wildlife Reserve, and lifting the moratorium on drilling in the Gulf, Osiecki said.
   The White House on Wednesday released a blueprint for a new, comprehensive energy policy that aims to find and produce more domestic oil, develop alternative fuels and improve the efficiency of vehicles, buildings and machinery. Among the tools will be new standards for large trucks.
   In a major address, President Obama said he would put in motion steps to reduce consumption of imported oil by a third within a decade.
   America imports more than 11 million barrels of oil per day.

Obama

      'The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground. We can't afford it when the costs to our economy, our country and our planet are so high,' Obama said, in a speech at Georgetown University.
   The United States will still require oil, including imported petroleum, as it transitions to alternative types of energy, but it should come from more stable sources such as Canada, Mexico and Brazil, he said.
   Last year, U.S. oil production reached its highest level since 2003 and, for the first time in more than a decade, imported oil represented less than half of the oil consumed, the president said.
   The administration, he said, is not opposed to offshore oil drilling, but is putting in place precautions to prevent a repeat of last summer's BP oil blowout in the Gulf.
   'What we learned from that disaster helped us put in place smarter standards of safety and responsibility. For example, if you're going to drill in deepwater, you've got to prove before you start drilling that you can actually contain an underwater spill. That's just common sense.
   'And lately, we've been hearing folks saying, well, the Obama administration, they put restrictions on how oil companies operate offshore. Well, yes, because we just spent all that time, energy and money trying to clean up a big mess,' Obama said.
   The Interior Department is expediting permits for companies that meet the new, higher standards, including approval of 39 shallow-water permits and seven deepwater permits in recent weeks, he said.
   'When it comes to drilling offshore, my administration approved more than two permits last year for every new well that the industry started to drill. So any claim that my administration is responsible for gas prices because we've 'shut down' oil production, any claim like that is simply untrue. It might make for a useful sound bite, but it doesn't track with reality.
   'What is true is we've said if you're going to drill offshore you've got to have a plan to make sure that we don't have the kind of catastrophe that we had last year. And I don't think there's anybody who should dispute that that's the right strategy to pursue.'
   Part of the new energy strategy is to provide incentives for oil companies to tap reserves on leases they are sitting on, the president added. And, he said, the administration will assess new oil and gas developments in Alaska, as well as offshore development in the Mid-Atlantic and Southeast.
   But the United States has to quickly find other sources of clean energy because it consumes a quarter of the world's oil but only has 2 percent of its reserves, he stressed.
   He called for Congress to pass legislation promoting expanded production of natural gas in a safe way and said he's directing the U.S. Navy and departments of Energy and Agriculture to create advanced biofuels for commercial airliners, trucks and the military.
   Obama also touted the deal brokered by the White House with automakers last year to improve the fuel efficiency standards for cars and trucks made between 2012-2016 that will save 1.8 billion barrels of oil over their lifetime, and make them more technologically advanced. The administration this summer plans to propose the first-ever fuel efficiency standards for heavy-duty trucks and buses, and in the fall will announce the next round of fuel standards for cars, he said.
   The president ordered that all cars and trucks purchased by the federal government must be 100 percent alternative fuel, hybrid or electric vehicles, starting in 2015, and said that the government will partner with private companies that want to upgrade their large fleets.
   The government's sponsorship of electric vehicle production, he said, requires development of cleaner electric power generation, including clean coal, natural gas, wind, solar and nuclear energy.
   Obama criticized lawmakers who are trying to cut spending on clean-energy research and development programs, as well as subsidies to get new industries started, saying that these technologies are needed investments even in tough fiscal times and present new manufacturing opportunities that other countries are eagerly pursuing.
   Further inaction will only drive up the costs in terms of environmental cleanup, health care and lost economic capacity, he said.
   The administration's energy policy also calls for continued support of short-sea shipping to reduce congestion on highways, and freight infrastructure investments to move goods more efficiently. ' Eric Kulisch