Rising Gas Prices as a Political Cudgel

by on March 15, 2012 · 9 comments

in Economy, Energy, Politics, Popular

The right wing insists that the steady rise in gasoline prices are all Barack Obama’s fault; that his administration’s policies are the direct cause of our misery.  Intentionally so, they’d have us believe.  But the truth is far less sinister, and exactly the opposite of Republican messaging on the subject.

Gas prices are going up again.  I know, “Thank you Captain Obvious,” right?  It’s not exactly news since almost all of us have had the displeasure of pulling up to the pump and watch as our bank accounts shrink by ever increasing amounts.  It’s a pretty helpless feeling knowing that we’re being held prisoner by the oil companies.  I mean, what are we going to do, not put gas in our cars?

There are lots of reasons to be concerned about this, though, not the least of which is the increase in the cost to drive from OB to Oceanside and back.  Gas prices have a much bigger effect on the economy at large than just the cost to fill up our tanks.  Rising gas prices means a rise in the cost to fill up the trucks that bring our food to market, which means an increase in what we pay at the register.  It means that shipping costs for the “necessities” we buy on Amazon.com goes up.  It means that just about all of our everyday expenses go up, leaving less and less disposable income available for those recreational pursuits that help us keep our sanity.

I know, this is all really depressing stuff.  I don’t mean to be a buzzkill; I’m just pointing out the facts, grim as they may be.

When prices go up and times get tough, it’s only human nature that we seek out someone to blame.  As if there’s someone out there that has the ability to fix all of our problems by decree so that we can all live happily ever after.  In this case, the President of the United States is generally seen as that guy.  And because people tend to blame the president for not doing enough to contain gas prices, the president’s approval ratings take a bit of a dive.  This seems to be more true for President Obama—despite the positive signs on economic growth—than it was for Bush, although it’s basically the case for any president.

Even the political punditocracy gets into the act.  Right wing Republicans have excoriated Obama for his inability to control prices at the pump, going so far as to insist that he has some sinister plan to push prices so high as to deliberately make life as miserable as possible for all Americans.  It’s been the claim of all three major Republican presidential candidates that Barack Obama’s energy policy and overall handling of the economy is to blame for higher gas prices, and that they could all do better.  You know, the old “Drill Baby Drill” refrain, as if putting an oil rig at every street corner was the practical answer to all of America’s energy woes.

The problem is that they’re wrong.  No, actually, that’s not right.  The problem is that they’re lying to you.  They want us to think that Barack Obama is some evil Muslim conspirator that’s aiming to bring the United States down from within; that he’s some sort of Islamic Manchurian Candidate.  They scream and wildly gesticulate about how Obama is “choking off U.S. oil production.”   Mind you, these are the same people who still think the world is flat.

The truth is that while he gets the lion’s share of the blame, real experts say that there is very little the president can do to control the rise in oil prices.  No more than George W. Bush could, and he and his overlord Darth Cheney were Texas oil men.  And Obama certainly isn’t looking to intentionally drive up gas prices, despite hysterical claims to the contrary.

But here are the facts:  Oil imports are down and domestic drilling has reached its highest level since 2003 (when the oil men were in charge), and the number of operating oil rigs has quadrupled during the Obama presidency.  According to federal reports, the U.S. now imports 45% of its oil, down from 57% in 2008.  So if President Obama really wanted to “choke off” domestic production, wouldn’t he have simply instructed federal agencies to shut down all of this new production?

Federal agencies—under instruction from the White House—since late 2011 have resumed selling new leases to oil companies to drill in the Gulf of Mexico, and announced annual lease sales in the Arctic Ocean and the Alaska National Petroleum Reserve.  They also extended 1,400 oil drilling leases to companies that were disrupted by the BP oil spill in the Gulf.  So yeah, looks like they’re trying to “choke off” domestic production alright.

As for the Keystone XL pipeline:  Republicans excoriate the Obama administration for not immediately approving it, pointing to it as further proof that he’s trying to kill domestic production.  They say that the pipeline will increase domestic supplies exponentially, lower gas prices, and create tens of thousands of jobs.  Only that’s not exactly true.  Actually, it’s not at all true.  Analysts have looked at it—and by TransCanada’s own admission—it won’t increase supplies.  There’s already a glut in the Midwestern United States (where the pipeline will be placed), and it will actually raise gas prices.  Significantly.  Like 20 cents per gallon in the Midwest.  And it won’t come online until 2014 at the earliest, so it would do exactly nothing to provide relief right now even if they were right.

Short of releasing supplies from the National Strategic Petroleum Reserve—which only helps when supplies are low, and supplies are more than adequate right now—there’s not much the president himself can do to control the price of a gallon of gas in this country.  And Republicans know it.  How do we know they know it?  Because four years ago they said so while George W. Bush was still president.  Said it directly.  Unambiguously. (See the Ed Schultz clip below for proof.)

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What is driving up our gas prices are the oil speculators on Wall St.  They’re betting on long term shortages caused by turmoil in Lybia, Egypt, Syria, and by Republican warmongering on Iran.  Commodities traders are bidding up the cost of oil futures, driving the cost of a barrel of oil past its current price of $106, up from $44 in January of 2009.  It’s the free market at work, and boy is it working for the traders.  Which is supposedly what the Republicans want.  So it’s kind of strange that they’d be complaining about it.

And oh-by-the-way:  The Dodd-Frank Financial Reform Act contains provisions that would place limitations on oil speculators, largely preventing such huge surges in prices from happening.  But of course they’re trying to get rid of that.  So they really DON’T want to see prices come down.  Or so it seems.  It’s all so schizophrenic.

Here’s the bottom line:  If President Obama were to say that the sky is blue, Republicans would respond in a fury that the sky is, in fact, red, and that it’s all some sort of communist socialist plot to make us all think that the sky is blue.  So it really doesn’t matter what the president can and cannot do.  As long as they can make him look bad—and they’re willing to do anything to that end—it doesn’t really matter what’s true and what’s not.

If Republicans really cared about rising gas prices, they would do something about the speculators.  But does anyone believe that they’d even consider such a step?

{ 9 comments… read them below or add one }

avatar unWASHEdwalmaRtthONG March 15, 2012 at 8:57 am

Oil speculation also largely occurs at the unregulated market in Atlanta, Ga. Perhaps a third of the cost of oil is due to speculation on futures.
The GOP is morally bankrupt.

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avatar Bearded OBcean March 15, 2012 at 9:28 am

The United States sits on the largest deposits of fossil fuels in the world. However, we neuter our production through regulation and politics.

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avatar Bud Pillsbury March 15, 2012 at 10:07 am

I totally believe Obama when he says there’s no silver bullet on gas prices…
http://youtu.be/lGIo6V8D5j0

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avatar Bud Pillsbury March 15, 2012 at 10:19 am

If it feels like we’ve seen this movie before, that’s because we have. Gas prices went up around this time last year. They shot up in the spring and summer of 2008. This has been happening for years. And every time prices start to go up – especially in an election year – politicians dust off their three-point plans for $2 gasoline. They head down to the pump, make sure a few cameras are following them, and start acting like they can wave a magic wand and you’ll have cheap gas forever. Sound familiar?
Barack Obama 3/15/12

Obama giving a speech on gas prices in front of a gas station in 2008 when gas was $3.55 a gallon.
http://youtu.be/dnLP12X3EgM

I totally believe Obama on gas prices.

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avatar Dickie March 15, 2012 at 10:54 am

just love the graphic at the top of the article . . .

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avatar Citizen Cane March 16, 2012 at 12:05 pm

I don’t think there needs to be profit at every level. Let’s keep the free market for the exploration and drilling of crude oil, but have the government take charge of the refining and distribution of gasoline. Sort of like the same logic for having public utilities for electricity.

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avatar Kim March 17, 2012 at 9:40 am

Oil and gas should be price controlled. We’ve done it with other not as important stuff why not arguably the single most important driver of the economy. After the rich of course…hem hem hem. We could easily leave a healthy margin for Exxon and still be better off. If you feel like we need high prices to effect peoples actions, then rather than give it away take the raise in taxes buy something nice for the country.

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avatar Frank Gormlie March 17, 2012 at 2:22 pm

Heck, oil and gas should be nationalized! They are our national treasures. Why do the oil companies even get to claim its theirs in the first place?

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avatar mr.rick March 17, 2012 at 8:10 pm

It’s a cinch humans are gonna burn every dropof oil the earth has, unless we choke ourselves first. So the smart thing to do is just keep on keeping on until we are the last ones with oil. Why burn our oil when we can burn other peoples oil.

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