published Thursday, April 28th, 2011

Deflecting blame for high gas prices

There are many reasons for rising gasoline prices. They include high worldwide demand, instability in oil-producing nations, supply disruptions caused by wars and natural disasters, and other factors.

But the Obama administration’s policies are also a key reason why we’re paying so much at the pump.

For a time after the BP spill in the Gulf of Mexico, the administration halted deep-water drilling in the Gulf. It also has revoked vital leases for oil and gas exploration. Those measures reduce domestic supplies. And Energy Secretary Steven Chu, shortly before being nominated for the job by President Barack Obama, told The Wall Street Journal that high prices for gas are needed to get the U.S. energy sector overhauled!

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” he said. (Gasoline in Europe often costs more than double what we pay in America.)

But despite evidence that his own administration is doing things that are raising gas prices, the president has now ordered the creation of a task force to “root out” alleged fraud and manipulation of oil markets. What’s most revealing about that is that the administration offered no proof that the “traders and speculators” on whom the task force will partially focus have broken the law.

Attorney General Eric Holder said he would “press ahead with the investigation, even though he did not cite any current evidence of intentional manipulation of oil and gas prices or fraud,” The Associated Press reported. It added, “Given that no evidence has yet surfaced of actual fraud or price manipulation in oil markets, Obama’s remarks appeared, at least in part, as more of an attempt to assuage public anger over rising gas prices.”

In other words, the president is trying to take the focus off unwise government policies that have helped cause gas prices to go up. But if the policies don’t change, we shouldn’t be surprised when prices keep rising.

Just as ironically, the president on Tuesday urged dictatorial Middle Eastern nations such as Saudi Arabia to increase their oil output — while his administration continues clamping down on U.S. energy production!

There are already more than enough factors that can increase gasoline prices. The federal government should not be needlessly imposing still more.

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nucanuck said...

US oil production volume potential is too small to have much impact on world oil prices or US gasoline prices.

Prices are rising primarily because government economic policy is undermining the value of the US dollar. Other factors are growing world demand especially within oil exporting countries and developing countries, 30 years of world discoveries below replacement volume, rapid depletion in the world's largest oil fields, and political instability in oil producing regions.

Drilling or not drilling areas in the US would make a difference of only several pennies. To tell your readers otherwise is a shameful prevarication and may result in loss of reader respect.

We are at the beginning of the end of the age of oil.

April 28, 2011 at 1:32 a.m.
nucanuck said...

L4F,

You simply are ill-informed on oil. May I suggest you include theoildrum.com in your reading. They are not a politically biased site... mostly science geeks and hyper-educated types who know their stuff.

April 28, 2011 at 12:31 p.m.
BigRidgePatriot said...

The idea that the US production levels cannot impact oil prices is not based in reality. I see so much evidence to the contrary I don't even know where to start.

Maybe it would be easier if nucanuck laid out his evidence for his theory?

April 28, 2011 at 2:59 p.m.
nucanuck said...

BRP,

It has taken 12 years of reading and study to come to the conclusions that I have about energy. I'm sure I don't have all the answers, nor will I ever, however I find much of the information in the public domain to be simplistic at best, but mostly erronious.

To explain what I think about oil and why I think it would be a monumental effort. I would be happy to respond to individual issues however.

April 28, 2011 at 7:02 p.m.
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