Sharply lower U.S. production, rising domestic demand, and rising prices indicate a working OPEC strategy
to regain control.

Washington, D.C. – As American drivers take to the roads this Memorial Weekend holiday, oil prices are at this year’s highest—70 percent above mid-January lows and yesterday hit $50 for the first time in a year. Meanwhile, U.S. domestic producers have laid off hundreds of thousands of workers and cut nearly $400 billion in investment in future energy production, ensuring oil and fuel prices will continue to rise into the future.

“American consumers are thankfully enjoying relatively low prices at the pump this Memorial Weekend,” said SAFE CEO Robbie Diamond. “However, we must be aware that today’s low prices come with absolute assurance that they will be higher further down the road.”

“OPEC’s strategy is to return the market to a condition of relative short-term scarcity in which sellers have substantial leverage over buyers, thereby maximizing OPEC’s ability to manipulate prices and extract large rent from consumers. It is working. Our drivers next year might not be so lucky and feel the pain of OPEC and National Oil Companies once again”

SAFE’s National Strategy for Energy Security proposes clear recommendations for breaking the United States’ near complete reliance on oil to power our transportation sector and defend the American economy from the increasingly volatile and unpredictable global oil market. SAFE specifically calls for the establishment of a commission of experts (H.R. 4559) to investigate anticompetitive actions by OPEC, its member states, and other national oil companies, assess their impact on the U.S. economy, and put forth policy recommendations.

Ultimately, to protect the U.S. economy from the unfree, volatile global oil market, America must reduce oil’s monopoly in the transportation sector, and SAFE proposes the following to accelerate the adoption of advanced fuel vehicles:

• Restructure the federal tax incentive for electric vehicles to remove the 200,000 vehicle-per-manufacturer cap and phase down beginning in 2021.
• Reduce the value of the federal EV tax credit for vehicles over $40,000. Remove it completely for vehicles over $55,000.
• Create incentives for medium and heavy-duty advanced fuel vehicle purchases.
• Create performance-based standards for freight trucks that enhance freight efficiency and reduce oil consumption without negatively impacting road infrastructure or safety.

Moreover, the United State must support the advancement of next generation transportation technologies, including:

• Remove federal regulatory obstacles to the deployment of autonomous vehicles and allow broad commercialization once they are as safe as today’s cars.
• Federal rules on autonomous vehicles should preempt state standards. Varying state AV standards would create a patchwork of regulations and stymie adoption.
• Federal regulation on automotive safety should evolve to a more flexible and collaborative model based on performance-based standards.
• Create an alternative liability framework for early autonomous vehicle deployment to encourage adoption.

The full list of recommendations from the National Strategy for Energy Security: The Innovation Revolution can be found on SAFE’s website at www.secureenergy.org

About Securing America’s Future Energy (SAFE)

Securing America’s Future Energy (SAFE) is a nonpartisan organization that aims to reduce America’s dependence on oil and improve U.S. energy security to bolster national security and strengthen the economy. SAFE advocates for expanded domestic production of U.S. oil and gas resources, continued improvements in fuel efficiency, and in the long-term, breaking oil’s stranglehold on the transportation sector through alternatives like natural gas for heavy-duty trucks and plug-in electric vehicles. In 2006, SAFE joined with General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, and Frederick W. Smith, Chairman, President, and CEO of FedEx Corporation, to form the Energy Security Leadership Council (ESLC), a group of business and former military leaders committed to reducing the United States’ dependence on oil.

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