Rhetoric Continues As Gas Reaches Near $5 A Gallon

When you swipe your card at the pump, where does the money go to? When you grumble under your breath about the skyrocketed prices, who is really to blame? The answers to these hot-button questions were the center of the discussion at a local symposium for America's future of energy dependency.

Executives from Solar, Nuclear, Wind, Oil and Gas energy industries met at the Lower Bucks Campus of the Bucks County Community College on Thursday for the schools first energy conference. Issues on rising energy prices, job growth, and concerns about pollution took center stage.

"Right now, with gas prices, the big jump in price is almost entirely because of speculation -- $2.30 out of a $4 gallon of gas has nothing to do with supply and demand," said Doug Woosnam, a representative from the gas and oil heating group, the Stargas Partnership.

According to Woosnam, about half of the price you pay at the pumps are decided by government taxes and Wall Street market speculation.

“The government uses taxation as a mallet," said keynote speaker Rep. Mike Fitzpatrick. "If we wanted to reduce the cost of gas, we could easily reduce the rate of taxes."

According to Fitzpatrick, nearly 17 percent of every $1 paid for gas goes to state and federal taxes. In contrast, he said only around 7 percent goes back as profit to the oil companies.

The statistics match up with 2005 Department of Energy average dollar distribution study. According to the DOE, for every $1 of gas 53 cents goes to the cost of crude oil on the market, 9 cents goes to distribution and marketing costs, 19 cents goes to refining costs and profit margins, and the remaining 19 cents went to state and federal taxes.

With fuel and energy prices at the whim of stock speculators and tax leviers, Fitzpatrick said now is the time to encourage the private sector to invest the time and research to leap into alternative energy sources.

“It would be nice if we could flip a switch and run entirely on alternative energy, but that's simply not feasible,” said Terry Black, a representative from the Marcellus Shale Coalition.

Black's group, a coalition of natural gas mining companies, has taken interest in Pennsylvania in recent years after the discovery of large amount of gas in the Marcellus Shale -- a formation sediment on the Appalachian basin. Knowledge of the trapped gas in the shale was not entirely unknown, but recent surveying equipment and new extraction techniques, namely hydraulic fracturing, make the shale a profitable new site for natural gas mining.

Hydraulic fracturing is a process by which miners use pressurized water and chemicals to break apart shale, releasing the trapped gas.

According to Black, the Marcellus Shale deposit makes Pennsylvania one of the largest resources for natural gas in the United States.

“(Pennsylvania) has now recently been called the 'Saudi Arabia of the United States," Black said.

Black said he sees the mining of the shale as a integral part of a combined effort to end dependency of foreign fuel sources. According to Black, the deposits are large enough to maintain the current price of natural gas for at least five years.

In 2010, 3,000 shale mining sites were erected. Black said he expects to see a steady rate of 3,500 or more new sites every year until 2020.

Not everybody is for the drilling of the shale. At the symposium, Black acknowledged present concerns of the potential environmental impacts of using hazardous chemicals in soil. The potential environmental dangers and the finite supply of gas is why ultimately Black foresees a unilateral energy solution to be the future for America.

"A portfolio approach to our energy supply is the most beneficial. It fosters competition. It provides multiple solutions and helps end speculating (price modulation)," Black said.

It's hard to see the road for America in 10 or 20 years. The path seems uncertain, even to the executives that are on the front lines to witness the change. What seems to be certain is the growing feeling of necessity to break free of foreign fossil fuels that is currently brewing.

“Too long has America gone without a comprehensive energy strategy," Fitzpatrick said. "For almost 40 years of presidents, from Jimmy Carter to President Barack Obama, have talked about energy independence. Right now, we are being held as economic hostages to foreign oil."