Resources

Contacting Congress

Senators and House Representatives

All questions and comments can be directed to the Senator or Representative from your state.

Click here to search for your Senator

Click here to search for your Representitive

Below are sample letters that can be used to express your concerns. Please remember the letters that are hand-written or hand-addressed have a much greater impact, so hand-write the letter whenever possible.

Click here to download the Sample Letter #1.

Click here to download the Sample Letter #2.

Click here to download the Sample Letter #3. 

By Postal Mail
You can direct postal correspondence to your Senator’s or Representative’s office at the following address:
Office of Senator (Name)  or     Office of Representative (Name)
United States Senate        or     United States House of Representatives
Washington, D.C. 20510           Washington, D.C. 20510

By Telephone
Alternatively, you may phone the United States Capitol switchboard at (202) 224-3121.  A switchboard operator will connect you directly with the Senate or House of Representative office you request.
By E-mail
Some have e-mail addresses while others post comment forms on their web sites.  When sending an e-mail, please include your return postal mailing address.  Please be aware that as a matter of professional courtesy, many Senators and Representatives will acknowledge, but not respond to, a message from another Senator’s or Representative’s constituent.

A Primer On Gasoline Prices

Gasoline, one of the main products refined from crude oil, accounts for just about 17 percent of the energy consumed in the United States. The primary use for gasoline is in automobiles and light trucks. Gasoline also fuels boats, recreational vehicles, and various farm and other equipment. While gasoline is produced year-round, extra volumes are made in time for the summer driving season. Gasoline is delivered from oil refineries mainly through pipelines to a massive distribution chain serving 168,987 retail gasoline stations throughout the United States.1 There are three main grades of gasoline: regular, mid-grade, and premium. Each grade has a different octane level. Price levels vary by grade, but the price differential between grades is generally constant.

 

Figure 1. What Do We Pay For in a Gallon of Regular Grade?

 

 

What are the components of the retail price of gasoline?
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners.

In 2005 the price of crude oil averaged $50.23 per barrel, and crude oil accounted for about 53 percent of the cost of a gallon of regular grade gasoline (Figure 1). In comparison, the average price for crude oil in 2004 was $36.98 per barrel, and it composed 47 percent of the cost of a gallon of regular gasoline. The share of the retail price of regular grade gasoline that crude oil costs represent varies somewhat over time and among regions.

Federal, State, and local taxes are a large component of the retail price of gasoline. Taxes (not including county and local taxes) account for approximately 19 percent of the cost of a gallon of gasoline. Within this national average, Federal excise taxes are 18.4 cents per gallon and State excise taxes average about 21 cents per gallon.2 Also, eleven States levy additional State sales and other taxes, some of which are applied to the Federal and State excise taxes. Additional local county and city taxes can have a significant impact on the price of gasoline. Refining costs and profits comprise about 19 percent of the retail price of gasoline. This component varies from region to region due to the different formulations required in different parts of the country.

Distribution, marketing and retail dealer costs and profits combined make up 9 percent of the cost of a gallon of gasoline. From the refinery, most gasoline is shipped first by pipeline to terminals near consuming areas, then loaded into trucks for delivery to individual stations. Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline for resale to the public. The price on the pump reflects both the retailer’s purchase cost for the product and the other costs of operating the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner.

1National Petroleum News, May 2005.
2Energy Information Administration, Petroleum Marketing Monthly April 2006,
Table EN1 at: http://www.iea.doe.gov/pub/oil_gas/petroleum/data_publications
petroleum_marketing_monthly/current/pdf/enote.pdf

Factors Behind the Increase in Gasoline Prices in 2005

Since the beginning of 2005, U.S. retail gasoline prices have been generally increasing, with the average price of regular gasoline rising from $1.78 per gallon on January 3 to as high as $3.07 per gallon on September 5, as Hurricane Katrina further tightened gasoline supplies. But the hurricane is only one factor, albeit a dramatic one, which has caused gasoline prices to rise in 2005.

A major factor influencing gasoline prices in 2005 was the increase in crude oil prices. The price of West Texas Intermediate (WTI) crude oil, which started the year at about $42 per barrel, reached $70 per barrel in early September. Crude oil prices rose throughout 2004 and 2005, as global oil demand increased dramatically, stretching capacity along the entire oil market system, from crude oil production to transportation (tankers and pipelines) to refinery capacity, nearly to its limits. With minimal spare capacity in the face of the potential for significant supply disruptions from numerous sources, oil prices were high throughout 2005.

In addition, Hurricane Katrina had a devastating impact on U.S. gasoline markets, initially taking out more than 25 percent of U.S. crude oil production and 10-15 percent of U.S. refinery capacity. On top of that, major oil pipelines that feed the Midwest and the East Coast from the Gulf of Mexico area were shut down or forced to operate at reduced rates for a significant period. With such a large drop in supply, prices spiked dramatically. Because two pipelines that carry gasoline were down initially, some stations actually ran out of gasoline temporarily. However, once the pipelines were restored to full capacity and some of the refineries were restarted, retail prices began to fall. Increased gasoline imports in the fall of 2005, in part stemming from the International Energy Agency’s emergency release, also added downward pressure to gasoline prices. However, retail prices are likely to remain elevated as long as some refineries remain shut down and the U.S. gasoline market continues to stretch supplies to their limit.

Why do gasoline prices fluctuate?
Even when crude oil prices are stable, gasoline prices normally fluctuate due to factors such as seasonality and local retail station competition. Additionally, gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages.

Seasonality in the demand for gasoline – When crude oil prices are stable, retail gasoline prices tend to gradually rise before and during the summer, when people drive more, and fall in the winter. Good weather and vacations cause U.S. summer gasoline demand to average about 5 percent higher than during the rest of the year. If crude oil prices remain unchanged, gasoline prices would typically increase by 10-20 cents from January to the summer.

Changes in the cost of crude oil – Events in crude oil markets were a major factor in all but one of the five run-ups in gasoline prices between 1992 and 1997, according to the National Petroleum Council’s study, U.S. Petroleum Supply – Inventory Dynamics. About 47 barrels of gasoline are produced from every 100 barrels of crude oil processed at U. S. refineries, with other refined products making up the remainder.

Crude oil prices are determined by worldwide supply and demand, with significant influence by the Organization of Petroleum Exporting Countries (OPEC). Since it was organized in 1960, OPEC has tried to keep world oil prices at its target level by setting an upper production limit on its members. OPEC has the potential to influence oil prices worldwide because its members possess such a great portion of the world’s oil supply, accounting for about 40 percent of the world’s production of crude oil and holding more than two-thirds of the world’s estimated crude oil reserves. Additionally, increased demand for gasoline and other refined products in the United States and the rest of the world is also exerting upward pressure on crude oil prices.

Rapid gasoline price increases have occurred in response to crude oil shortages caused by, for example, the Arab oil embargo in 1973, the Iranian revolution in 1978, the Iran/Iraq war in 1980, and the Persian Gulf conflict in 1990. Gasoline price increases in recent years have been due in part to OPEC crude oil production cuts, turmoil in key oil producing countries, and problems with petroleum infrastructure (e.g., refineries and pipelines) within the United States. Additionally, increased demand for gasoline and other petroleum products in the United States and the rest of the world is also exerting upward pressure on prices.

Product supply/demand imbalances – If demand rises quickly or supply declines unexpectedly due to refinery production problems or lagging imports, gasoline inventories (stocks) may decline rapidly. When stocks are low and falling, some wholesalers become concerned that supplies may not be adequate over the short term and bid higher for available product. Such imbalances have occurred when a region has changed from one fuel type to another (e.g., to cleaner-burning gasoline) as refiners and marketers adjust to the new product. Gasoline may be less expensive in one summer when supplies are plentiful vs. another summer when they are not. These are normal price fluctuations, experienced in all commodity markets. However, prices of basic energy (gasoline, electricity, natural gas, heating oil) are generally more volatile than prices of other commodities. One reason is that consumers are limited in their ability to substitute between fuels when the price for gasoline, for example, fluctuates. So, while consumers can substitute readily between food products when relative prices shift, most do not have that option in fueling their vehicles.

Figure 2. Motor Gasoline Prices at Retail Outlets, 2005 Average Regular Grade, by Region
(dollars per gallon, including taxes)

 

Why do gasoline prices differ according to region?
Although price levels vary over time, Energy Information Administration (EIA) data indicate that average retail gasoline prices tend to typically be higher in certain States or regions than in others (Figure 2). Aside from taxes, there are other factors that contribute to regional and even local differences in gasoline prices:

Proximity of supply – Areas farthest from the Gulf Coast (the source of nearly half of the gasoline produced in the United States and, thus, a major supplier to the rest of the country), tend to have higher prices. The proximity of refineries to crude oil supplies can even be a factor, as well as shipping costs (pipeline or waterborne) from refinery to market.

Supply disruptions – Any event which slows or stops production of gasoline for a short time, such as planned or unplanned refinery maintenance, can prompt bidding for available supplies. If the transportation system cannot support the flow of surplus supplies from one region to another, prices will remain comparatively high.

Competition in the local market – Competitive differences can be substantial between a locality with only one or a few gasoline suppliers versus one with a large number of competitors in close proximity. Consumers in remote locations may face a trade-off between higher local prices and the inconvenience of driving some distance to a lower- priced alternative.

Environmental programs – Some areas of the country are required to use special gasolines. Environmental programs, aimed at reducing carbon monoxide, smog, and air toxics, include the Federal and/or State-required oxygenated, reformulated, and low-volatility (evaporates more slowly) gasolines. Other environmental programs put restrictions on transportation and storage. The reformulated gasolines required in some urban areas and in California cost more to produce than conventional gasoline served elsewhere, increasing the price paid at the pump.

Why are California gasoline prices higher and more variable than others?

The State of California operates its own reformulated gasoline program with more stringent requirements than Federally-mandated clean gasolines. In addition to the higher cost of cleaner fuel, there is a combined State and local sales and use tax of 7.25 percent on top of an 18.4 cent-per-gallon Federal excise tax and an 18.0 cent-per-gallon State excise tax. Refinery margins have also been higher due in large part to price volatility in the region.California prices are more variable than others because there are relatively few supply sources of its unique blend of gasoline outside the State. California refineries need to be running near their fullest capabilities in order to meet the State’s fuel demands. If more than one of its refineries experiences operating difficulties at the same time, California’s gasoline supply may become very tight and the prices soar. Supplies could be obtained from some Gulf Coast and foreign refineries; however,California’s substantial distance from those refineries is such that any unusual increase in demand or reduction in supply results in a large price response in the market before relief supplies can be delivered. The farther away the necessary relief supplies are, the higher and longer the price spike will be.

California was one of the first States to ban the gasoline additive methyl tertiary butyl ether (MTBE) after it was detected in ground water. Ethanol, a non-petroleum product usually made from corn, is being used in place of MTBE. Gasoline without MTBE is more expensive to produce and requires refineries to change the way they produce and distribute gasoline. Some supply dislocations and price surges occurred in the summer of 2003 as the State moved away from MTBE. Similar problems have also occurred in past fuel transitions.

Due to the threat of groundwater contamination, the use of the gasoline additive MTBE has been in the process of being phased-out for several years. More than half of the States have already banned the use of MTBE; the heaviest use of MTBE is currently in Texas and the Northeast, exclusive of New York and Connecticut. In 2005, a number of petroleum companies announced their intent to stop using MTBE in their gasoline in 2006. This was due to perceived potential for increased liability exposure due to the elimination of the oxygen content requirement for reformulated gasoline (RFG) included in the Energy Policy Act of 2005. Most of these companies will instead blend in ethanol to help replace the octane and clean-burning properties of MTBE. The rapid switch from MTBE to ethanol could have several impacts on the market that serve to increase the potential for supply disruptions and subsequent price volatility on a local basis. California faced temporary supply dislocations and price volatility during the summer of 2003 as MTBE was removed from gasoline in the State. Nevertheless, New York and Connecticut had a relatively smooth transition phasing out MTBE in 2004 as a result of better preparation from the gasoline suppliers and distributors. The supply and distribution system must undergo a number of changes to switch from MTBE-blended RFG to ethanol blended RFG, including developing supply chains to move more ethanol into undersupplied areas, converting terminal tanks from petroleum to ethanol, and adding blending equipment at terminals. It is expected that reformulated gasoline areas on the East Coast, especially in the Mid-Atlantic, will experience the most trouble obtaining ethanol supplies in a timely fashion due to logistical challenges of getting ethanol to and from terminals further inland by rail car. The Dallas-Fort Worth and Houston areas may also experience some trouble getting ethanol to major terminals due to limited rail access.

Operating costs – Even stations located adjacent to each other have different traffic patterns, rents, and sources of supply that influence retail price.

This brochure is available at:
http://tonto.eia.doe.gov/reports/reportsD.asp?type=other
For links to current gasoline prices and analyses, see:
http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp

The History of Oil

Most historians trace the start of the oil industry on a large scale to 1859. That year, a retired railroad conductor named Edwin L. Drake drilled a well near Titusville, Pa. Drake used an old steam engine to power the drill. After Drake’s well began to produce oil, other prospectors drilled wells nearby. Within three years, so much oil was being produced in the area that the price of a barrel dropped from $20 to 10 cents.

“By the early 1860’s, the oil boom had transformed western Pennsylvania. Forests of wooden derricks covered the hills, and thousands of prospectors crowded into the new boom towns. At first, wagons and river barges carried the oil to refineries on the Atlantic Coast. But the growing volume of oil soon required more efficient means of transportation. Railroads established branch lines to the fields and began to haul oil. In 1865, the first successful oil pipeline was built from an oil field near Titusville to a railroad station 5 miles (8 kilometers) away. Within 10 years, a 60-mile (97-kilometer) line ran from the oil region to Pittsburgh.”

“Prospectors discovered that other states had even larger oil deposits than Pennsylvania. By the 1880’s, commercial production of oil had begun in Kentucky, Ohio, Illinois, and Indiana. In 1901, the opening of the Spindletop field in eastern Texas produced the first gusher in North America. During the 1890’s and early 1900’s, California and Oklahoma joined Texas as the leading oil-producing states. Annual U.S. oil production rose from 2,000 barrels in 1859 to 64 million barrels in 1900. Commercial oil production spread rapidly throughout the world. Italy began to produce oil in 1860. After Italy, production began, in order, in Canada, Poland, Peru, Germany, Russia, Venezuela, India, Indonesia, Japan, Trinidad, Mexico, and Argentina. The first important oil discoveries in the Middle East occurred in Iran in 1908. Prospectors struck oil in Iraq in 1927, and in Saudi Arabia in 1938. Huge oil fields were later found in other states on the Persian Gulf.”

“Petroleum is one of the most valuable natural resources in the world. Some people call petroleum ‘black gold,’ but it may be better described as the lifeblood of industrialized countries. Fuels made from petroleum provide power for automobiles, airplanes, factories, farm equipment, trucks, trains, and ships. Petroleum fuels also generate heat and electricity for many houses and business places. Altogether, petroleum provides nearly half the neergy used in the world.”

“In addition to fuels, thousands of other products are made from petroleum. These products range from paving materials to drip-dry fabrics and from engine grease to cosmetics. Petroleum is used to make such items in the home as aspirins, carpets, curtains, detergents, phonograph records, plastic toys, and toothpaste.”

— The World Book Encyclopedia, CD-Rom Edition, 1997.

Did You Know?

That the abbreviation for a barrel of oil, “bbl,” actually stands for “blue barrel?” The word “barrel” only has one “b,” so why is the abbreviation for a barrel of petroleum “bbl?”  In the early 1860’s, when oil production began, there was no standard container for oil, so oil and petroleum products were stored and transported in barrels of all different shapes and sizes (beer barrels, fish barrels, molasses barrels, turpentine barrels, etc.). By the early 1870’s, the 42-gallon barrel had been adopted as the standard for oil trade. This was 2 gallons per barrel more than the 40-gallon standard used by many other industries at the time. The extra 2 gallons was to allow for evaporation and leaking during tranport (most barrels were made of wood). Standard Oil began manufacturing 42 gallon barrels that were blue to be used for transporting petroleum. The use of a blue barrel, abbreviated “bbl,” guaranteed a buyer that this was a 42-gallon barrel.

That natural gas is odorless, but has an organic compound called mercaptan added to give it an odor?That way, you can detect possible leaks!

What do these things have in common: ink, crayons, bubble gum, dishwashing liquid, deodorant, eyeglasses, tires, and heart valves?  They are ALL made from petroleum!  Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas each day!  But, as shown below, petroleum is not just used for fuel!  Following is a partial list of products made from petroleum (144 of 6,000 items!):

One 42-gallon barrel of oil creates 19.4 gallons of gasoline.

The rest (over half) is used to make things such as:

Solvents Diesel Motor Oil Bearing Grease
Ink Floor Wax Ballpoint Pens Football Cleats
Upholstery Sweaters Boats Insecticides
Bicycle Tires Sports Car Bodies Nail Polish Fishing lures
Dresses Tires Golf Bags Perfumes
Cassettes Dishwasher Tool Boxes Shoe Polish
Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape
CD Player Faucet Washers Antiseptics Clothesline
Curtains Food Preservatives Basketballs Soap
Vitamin Capsules Antihistamines Purses Shoes
Dashboards Cortisone Deodorant Footballs
Putty Dyes Panty Hose Refrigerant
Percolators Life Jackets Rubbing Alcohol Linings
Skis TV Cabinets Shag Rugs Electrician’s Tape
Tool Racks Car BatteryCases Epoxy Paint
Mops Slacks Insect Repellent Oil Filters
Umbrellas Yarn Fertilizers Hair Coloring
Roofing Toilet Seats Fishing Rods Lipstick
Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber
Speakers Plastic Wood Electric Blankets Glycerin
Tennis Rackets Rubber Cement Fishing Boots Dice
Nylon Rope Candles Trash Bags House Paint
Water Pipes Hand Lotion Roller Skates Surf Boards
Shampoo Wheels Paint Rollers Shower Curtains
Guitar Strings Luggage Aspirin Safety Glasses
Antifreeze Football Helmets Awnings Eyeglasses
Clothes Toothbrushes Ice Chests Footballs
Combs CD’s Paint Brushes Detergents
Vaporizers Balloons Sun Glasses Tents
Heart Valves Crayons Parachutes Telephones
Enamel Pillows Dishes Cameras
Anesthetics Artificial Turf Artificial limbs Bandages
Dentures Model Cars Folding Doors Hair Curlers
Cold cream Movie film Soft Contact lenses Drinking Cups
Fan Belts Car Enamel Shaving Cream Ammonia
Refrigerators Golf Balls Toothpaste Gasoline

That crude oil comes from plant and animal material that died millions of years ago? Heat and pressure turned the matter into a thick dark liquid. Crude oil is also called petroleum or fossil fuel.

That crude oil and natural gas are found deep in the ground trapped in pools between layers of rocks?

That the term petroleum comes from the Latin stems petra, “rock,” and oleum, “oil” – “rock oil.” It is used to describe a broad range of hydrocarbons that are found as gases, liquids, or solids beneath the surface of the earth. The two most common forms are natural gas and crude oil.

That there are three different types of crude oil:

Heavy Crude – which is dark, thick and sticky
Medium Crude
Light Crude – which is a light, golden color and flows easily