Gas prices that continue to decrease around the nation- some as low as $2.50 a gallon- certainly have people talking. A congressional debate has broke out regarding increasing federal gas taxes to help fun infrastructure projects.
So what is the gas taxes for?
- rebuilding roads, sidewalks and bridges
- eliminating the $16 billion dollar funding gap in planned construction costs and actual funds
What is the likely hood of it being passed?-
- Passing a gas tax in a republican controlled house and senate is not very likely
- Barbara Boxer (D) and Nancy Pelosi (D) both argue for higher gas taxes saying because of the low gas prices Americans can afford to pay a higher tax
- There is a small amount of support from republican senators
It is important to understand why gas prices have dropped so low.
Saudi Arabia has declared war on the American energy industry.
Saudi companies have begun losing market shares, as people invest in American oil companies.
Between 2001 and 2011, the weekly U.S. field production of crude oil averaged 5.5 million barrels per week.
The weekly U.S field production of crude oil in 2014 averaged 9.1 million barrels. According to international energy experts America is predicted to be the number one producer of oil by 2015.
Needless to say- the Saudi’s are not happy about losing their market.
In recent weeks Saudi Arabian drilling companies have been producing double if not triple the amount of crude oil they were before. By drastically increasing their supply, they were able to drive down the price. In fact, the Saudi drilling companies were so successful at this that many American drilling companies including WBH Energy (located in Texas) were unable to compete and had to declare bankruptcy.
America is in an all out energy price war with the Middle East, and losing.
I live near a American drilling site. About a month ago the rigs were running up and down the road 24-7. I couldn’t believe the amount of rig traffic there was, it seemed like they never stopped working. Then about 2 weeks ago it all stopped. The American drilling company was unable to compete with their Saudi counterpart. The stock prices of American drilling companies are falling right along with the gas prices.
The Saudis recent push for production coupled with increasing fuel efficiency in vehicles has not only begun crippling American companies, but also American infrastructure.There is not enough money being spent on gas- therefore there is not enough money to fix the roads.
by Kyra Azzato