Vilsack defends Obama on gas prices

SUNBURY — While there is no silver bullet to bring down gas prices immediately, President Obama has put the U.S. on the right path to reducing our reliance on foreign oil, said Agriculture Secretary Tom Vilsack on Monday in an exclusive interview with The Daily Item.

Vilsack, a former governor of Iowa, said that without the bio-fuel industry, gas prices might be 80 cents higher than they are now.

“Over the past few years,” he said over the phone from Washington, D.C., “renewable energy use has nearly doubled. In fact, in 2011, the United States reclaimed the position as the world’s leading investor in clean energy — but staying on top will depend on smart, aggressive action moving forward. USDA is helping lead the way with this effort by creating new opportunities for energy development in rural America.”

“Are we frustrated by the high price of oil?” he added. “Sure we are. But we’re doing all we can.”

Obama has been attacked by Republicans over the past few months for doing nothing to prevent the skyrocketing cost of gasoline, something Vilsack vigorously denies.

“The first thing people have to understand,” he said, “is that gas prices are set by the world price of oil. And that has to do with not just what’s happening in the United States, but what’s happening around the world.”

As emerging economies like China expand their economy, he continued, you see more competition for the supplies that are being produced worldwide, which is reflected in higher prices. There is also a lot of talk about Iran and how that situation might eventually affect supplies, and what interference (in oil supply) that might take.

Vilsack also said speculators were in part responsible for the fast rise in prices. In Obama’s defense, Vilsack said, “I think people in the United States have to ask three questions: number one, is this administration doing all it can to expand access to domestically produced oil and gas, so that we can do the best we can at marshaling our own resources.”

And the reality is, he said, that oil and gas production has increased every year the president has been in office. “We’ve opened up millions of new acres of leased opportunities for oil and gas exploration. And that, combined with being the world’s leading producer of natural gas, means that we are indeed importing significantly less oil than we did three years ago, and certainly, for the first time in 13 years we’re now importing less than 50 percent of our oil needs.”

Second, he said, are we doing all we can to use the gas and energy that we have? And there, “We have been quite aggressive in urging auto manufacturers, for example, to improve efficiency standards,” Vilsack said. “And then the third and final piece of this is, what are the alternatives? Do we necessarily have to rely on solely on oil and natural gas, and the answer is that while fossil fuels are certainly important, it’s also important to support and encourage renewable energy sources, such as solar, geo-thermal. And we have doubled the number of bio-fuels being produced in this country.”

Strategic oil reserves

About releasing oil from the strategic oil reserve, Vilsack said, “The president has in the past used that as part of his strategy, but right now there is no indication that’s what he intends to do. You have to be very careful about doing this. You have to do it at the right time and for the right reasons.”

In the meantime, Vilsack said Obama has authorized a higher mix of ethanol to oil per gallon of gas, from 10-90 to 15-85. All refineries have to do, he said, is register with the Environmental Protection Agency for permission to use 15 percent ethanol. “That would help to extend our supplies significantly. So it seems that the easiest step now before we tap the strategic reserve is to enhance and extend our bio-fuel use.”

Marcellus Shale

The key here is not to shut this off as an available source, but to make sure we use it most efficiently, and safely. There is an awful lot of work being done in the Energy Department looking at ways fracking can be done, Vilsack said.

“This administration has proposed a transparency of the chemicals that are being used so that people can be reassured that the chemical process is the right process and continue to promote more environmentally safe ways to do things. As long as this can be done and as long as there is transparency, in terms of the chemicals used, the president is not against the fracking.”

Vilsack said the president has encouraging mass transportation systems to use natural gas as their fuel.

Farm subsidies

“First and foremost,” Vilsack said, “it is important that we have a safety net because prices don’t always stay high or robust, as they have for the past few years. Certainly, that’s true in the dairy industry. We are seeing milk production up and that might affect prices and we don’t want to get ourselves back to the 2009 situation.”

Vilsack anticipates a change in the way the safety net is constructed when Congress gets to look at the farm and jobs bill 2012. “I would think,” he said, “that farmers will probably see less direct payments than they’ve seen in the past, more support for crop insurance, and that if farmers are faced with a steep decline in prices, or they face a natural disaster, there would be some additional help above and beyond crop insurance.”