Gas prices and politics

Gas prices and politics

February 23rd, 2012 in Opinion Times

Gasoline prices are rising for several reasons, none of which have anything to do with the political war that Republicans have promised to wage over rising prices at the pump.

Hedge fund managers and financial speculators looking for a quick killing, for example, have bid up oil commodity futures 35 percent since September on the basis of several converging economic issues. One is the outlook for an improving American economy -- and hence more energy use -- complemented by new calm over the Europe's sovereign debt troubles and an interim resolution to the Greek bailout debacle.

Another price factor is Iran's chilling promise to cut off oil shipments to Great Britain and France -- a move that would tighten supplies relative to rising demand -- in response to sanctions imposed by Western powers on Teheran for its nuclear weapons program. And China, now the world's largest energy consumer, is buying up futures contracts to refuel its new growth plan.

Lastly, American refiners are getting ready to shut down their refineries to switch over to cleaner, and a bit more expensive, summer gasoline blends. With the price of crude already rising for the other reasons, oil companies and refiners traditionally tack on a higher profit when oil prices surge.

Republicans, to be sure, are not about to criticize the heavy bets waged by hedge fund managers and Wall Street speculators as the cause for higher gasoline prices. These are the very people who are now digging into their deep pockets to finance the super PACS that are propelling and shaping the conservative campaigns of the leading Republican presidential contenders.

So their tack is to blame rising gas prices on President Obama, never mind the factual figures that document his bent for more drilling and more U.S. production.

Indeed, Obama's effort to boost U.S. energy supplies, though it has disheartened staunch conservationists, has been notable. The number of oil drilling rigs at work in U.S. oil fields (land and water) has quadrupled since Obama took office, and domestic oil production has increased every single year since then. Last year's production was the highest in eight years, easily trumping the output achieved by the last Bush administration.

With that record, and with the Obama administration planning to allow even more new drilling in Alaska, it's inaccurate and grossly unfair to blame rising gasoline prices on Obama. Criticizing him for waiting for a completed environmental study of the proposed TransCanada XL pipeline is faulty, as well. Though there are good reasons to block the pipeline -- Canada's heavy tar shale crude easily corrodes pipelines, and a spill could wreck the critical Ogallala aquifer that dry-land Midwestern farmers and ranchers rely on -- its production is at least two years away, and most of it is already committed for export.

Republicans don't want to deal with these facts, of course. House Speaker John Boehner assembled his fellow Republicans last week to finalize a strategy of blaming Obama for any gasoline price hikes, and that's the story they're sticking to.

Regardless, it's as inaccurate as it is wrong in principle. Obama's best long-term energy policy is his "all in" plan -- more production, and also more alternative fuels, and more conservation. For the latter, he's already gotten Detroit to agree to doubling its average gas mileage standard by 2025, so our nation's smallish, finite supplies will last longer and someday benefit our children and their children.

Sadly, all Republicans can think of is to blame Obama for the world's equally finite, and rapidly diminishing, supplies of oil. That's not helpful from any viewpoint.