published Sunday, March 13th, 2011

The president and gas prices

What does President Barack Obama think about the sky-high — and rapidly rising — prices that Americans are paying for gasoline in the wake of major disruptions across the oil-rich Middle East?

Well, naturally, the president is not telling the American people — who are already enduring serious unemployment and an economic crisis — that it’s good that they have to pay more to fill up.

But we spotted an unusual and troubling comment by Steven Chu, the man whom the president appointed as U.S. energy secretary.

In 2008, not long before then-Sen. Obama became President Obama, Chu told The Wall Street Journal that higher prices were the key to getting our energy sector overhauled.

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” he said.

Well, today a gallon of gas will cost you around $10 in Europe, The Wall Street Journal points out.

Is that what we want here, especially at a time when many families are unsure how they will get by month to month? Can they afford to pay $6 or $7 more for a gallon of gas?

The president is distancing himself from Chu’s remarks and publicly offering sympathy to Americans hit hard by expensive gasoline. But it’s not only those around him who have made strange comments in support of higher energy costs.

Obama himself told the San Francisco Chronicle in 2008 that “electricity rates would necessarily skyrocket” if he won approval for his “cap-and-trade” plan to restrict so-called “greenhouse gases.”

Here is what he said in the videotaped interview: “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

It certainly sounds as if he wants us to pay more for energy.

But for a moment, set aside what the president says and consider what his administration does — since that’s an even better indicator of what the president truly believes.

The Wall Street Journal’s Kimberley Strassel summarizes: “In March of last year, Mr. Obama reversed or scaled back nearly every major offshore oil opportunity that has come about since the price spike of 2008 — effectively reimposing a moratorium on drilling off the coasts. His administration has killed leases in developmentally crucial areas of Alaska. His EPA has refused to issue permits. The White House used the BP oil spill as an excuse to also shut down the deep-water Gulf. Onshore? Interior Secretary Ken Salazar has revoked oil-and-gas leases. The EPA is suffocating the coal industry with regulation. One of the president’s only clear State of the Union proposals was to raise taxes on oil and gas.”

In other words, while the president is expressing sympathy to Americans enduring high gasoline prices, he is taking actions that will make not only gas but other types of energy more expensive.

Wouldn’t it be wiser and more economical to increase safe, clean domestic energy production instead, and to reduce our reliance on oil from unstable countries?

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Plato said...

March 2010, not even a year ago president Obama proposed opening up parts of the Atlanta, the Gulf of Mexico and Alaska to drilling without any prodding from the Right. Unfortunately the irresponsibility and negligence of BP which also uncovered fraud and corruption within the government agency the regulates drilling, nixed the idea. Now we have to take a step back and make sure we don't wind up with another environmental catastrophe like we had last year in the Gulf.

Notwithstanding the necessary action of the government it is silly to assume that more domestic drilling is going to have much of any appreciable effect on the price of crude, and gas at the pump. Oil is a global commodity. It's price is determined by the futures markets. The US at full capacity only contributes about 7 million barrels a day to the mix which is very small. If we were able to even produce an extra million a day it wouldn't budget the price of crude and if it did, OPEC could easily reduce capacity by an equal amount to level the supply and keep prices the same. This is a ludicrous argument made solely for political purposes and is best summed up by this quote:

"Drilling offshore to lower oil prices is like walking an extra 20 feet per day to lose weight," said David Sandalow, a senior fellow at the Brookings Institution, and author of Freedom from Oil. "It's just not going to make much difference."

March 13, 2011 at 9:25 p.m.
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