The President can’t affect gas prices, but can gas prices affect the Presidential election?

With the laughable slate of moronic theocrats, disgraced demagogues, corporate villains, and states-rights racists that the Republican party has put forward to run against Obama, I’d say that, barring some epic scandal, Obama is guaranteed a second term… that is, if the price of gas doesn’t exceed $4.50 a gallon. I’ve read Nate Silver’s analysis, and I believe him when he says that there isn’t necessarily a direct correlation between gas prices and approval ratings, but I can’t help but think that the whole 2012 election could come down to the price at the pump. And, given what we’re hearing from the talking heads at Fox News and the Republican candidates, the dark forces amassing on the right clearly feel as though they’ve found Obama’s Achilles’ heel.

By now, you’ve no doubt heard that Newt Gingrich is promising, if elected, to bring down the price of gas to $2.50 a gallon. It’s complete fantasy, of course, but there’s some percentage of our criminally uninformed electorate that will buy into the ridiculous notion that our President somehow has control over such things. And it’s not just the difference between $2.50 and $4.00 that we’re talking about, either. You see, according to Gingrich, Obama has plans to move the price of gas to $10 a gallon. Here’s what Newt had to say a few days ago: “I’m happy to say the Gingrich plan moves you towards $2.50 or less. The Obama plans moves you towards $9 or $10 or more.”

As columnist Fareed Zakaria correctly notes, it’s “pure political pandering.” Here, with more on that, is a clip from Zakaria’s blog, followed by video of him on Anderson Cooper’s show yesterday, debating the matter with Stephen Moore, senior economics writer for the Wall Street Journal.

…The world consumes about 80 million barrels of oil a day. The total U.S. increase in production, if you were to do everything that Newt Gingrich fantasizes about, would be less than half a percent of that. So the chance that it would have any impact on the price of oil, particularly in the short run, is pure fantasy. Newt surely knows better.

The truth of the matter is that we are in the middle of a great boom in domestic oil production. We are at the highest levels in 30 years. The United States for the first time is actually exporting oil rather than importing oil, and it has made no difference to our prices. In fact, as we can see, oil prices have gone up. Why? Because, (A) China is growing, India is growing, etc. and (B) people are worried about a possible war with Iran – geopolitical concerns. So these are not things that you can easily fix. You’re not going to get China to slow down. You are not going to change the fact that there are genuine concerns about Iran. Increasing American domestic production is such a marginal issue at this point that it’s really totally irresponsible for Newt Gingrich to be saying this…

And, to his credit, the President has come out swinging. Obama not only explained the situation this morning, in his weekly address, but called for Congress to end nearly $4 billion in annual subsidies to big oil, saying, “We’re going to put every single Member of Congress on record: They can either stand up for oil companies, or they can stand up for the American people.” I’d argue that he should have done that upon taking office, but better late than never… Of course, this could just be a warning shot across their bow, meant to encourage them to keep the prices at the pump low until after the election… At any rate, here’s what Obama had to say.

Hi, everybody. As I’m sure you’ve noticed over the past few weeks, the price at your local pump has been going up and up. And because it’s an election year, so has the temperature of our political rhetoric.

What matters most to me right now is the impact that rising prices have on you. When you’ve got to spend more on gas, you’ve got less to spend on everything else. It makes things harder. So I wanted to take a minute this weekend to explain what steps my Administration is taking when it comes to energy – most importantly, producing more of it while using less of it.

The truth is: the price of gas depends on a lot of factors that are often beyond our control. Unrest in the Middle East can tighten global oil supply. Growing nations like China or India adding cars to the road increases demand. But one thing we should control is fraud and manipulation that can cause prices to spike even further.

For years, traders at financial firms were able to game the energy markets, distort the price of oil, and make big profits for themselves at your expense. And they were able to do all that because of major gaps and loopholes in our regulations. When I took office, we did something about it.

The Wall Street reforms I signed into law are helping bring energy markets out of the shadows and under real oversight. They’re strengthening our ability to go after fraud and to prevent traders from manipulating the market. So it’s not just wrong, but dangerous that some in Congress want to roll back those protections and return to the days when companies like Enron could avoid regulation and reap enormous profits, no matter who it hurt.

What’s more, at a time when big oil companies are making more money than ever before, we’re still giving them $4 billion of your tax dollars in subsidies every year. Your member of Congress should be fighting for you. Not for big financial firms. Not for big oil companies.

In the next few weeks, I expect Congress to vote on ending these subsidies. And when they do, we’re going to put every single Member of Congress on record: They can either stand up for oil companies, or they can stand up for the American people. They can either place their bets on a fossil fuel from the last century, or they can place their bets on America’s future. So make your voice heard. Send your representative an email. Give them a call. Tell them to stand with you.

And tell them to be honest with you. It’s easy to promise a quick fix when it comes to gas prices. There just isn’t one. Anyone who tells you otherwise – any career politician who promises some three-point plan for two-dollar gas – they’re not looking for a solution. They’re just looking for your vote.

If we’re truly going to make sure we’re not at the mercy of spikes in gas prices every year, the answer isn’t just to drill more – because we’re already drilling more. Under my Administration, we’re producing more oil here at home than at any time in the last eight years, that’s a fact. We’ve quadrupled the number of operating oil rigs to a record high, that’s a fact. And we’ve opened millions of acres on land and offshore to develop more of our domestic resources.

Those are the facts. But we can’t just rely on drilling. Not when we use more than 20 percent of the world’s oil, but still only have 2 percent of the world’s known oil reserves. If we don’t develop other sources of energy, and the technology to use less energy, we’ll continue to be dependent on foreign countries for our energy needs. That’s why we’re pursuing an all-of-the-above strategy. As we develop more oil and gas, we’re also developing wind and solar power; biofuels, and next-generation vehicles – and thousands of Americans have jobs right now because of it. We need to keep making those investments – because I don’t want to see those jobs go to other countries. I want to create even more of them right here in America.

And after three decades of inaction, we raised fuel economy standards so that by the middle of the next decade, our cars will average nearly 55 miles per gallon. That’s nearly double what they get today. That means you’ll only have to fill up every two weeks instead of every week. And that will save the typical family more than $8,000 over the life of the car – just by using less gas.

Combined, these steps have helped put us on a path to greater energy independence. Since I took office, America’s dependence on foreign oil has gone down every single year. In 2010, for the first time in 13 years, less than half the oil we used came from foreign countries.

We can do even better. And we will. But what we can’t do is keep being dependent on other countries for our energy needs. In America we control our own destiny. So that’s the choice we face – the past, or the future. And America is what it is today because we have always placed our bets on the future. Thanks, and have a great weekend.

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  1. Aturo Smorf
    Posted March 18, 2012 at 2:38 am | Permalink

    Surely Santorum can get it down to $2.00 a gallon.

    I’d love to see them going back and forth during a Republican debate, in a kind of reverse auction, each saying that he can get a gallon of gas a little be cheaper than his opponent, until one of them blurts out that gas will be FREE!

  2. Lynne
    Posted March 18, 2012 at 10:21 am | Permalink

    The government could get gas down to $2.50/gal with direct subsidies. That would be a really bad idea though. People don’t realize this but sustained high gasoline prices could be good for our country.

    I have to admit though, I’ve noticed that a lot of the people who demand lower gas prices are free-market tea party types. So I wonder. Would their heads explode if the federal government decided to subsidize gasoline in order to keep prices low enough for them to continue living in their sprawled out communities with their large cars and trucks?

  3. Taco Tom
    Posted March 18, 2012 at 7:08 pm | Permalink

    Great comment Lynne. Of course many things would explode the heads of Tea party folks….if they were logical thinking types. Since that is not the case, no worry about that happening any time soon.
    While gas prices should in fact be higher than they are, all folks will be upset when that happens. Even though I think people should drive less, I feel a bit exempt when it comes to myself.
    What I like is Mark’s not so veiled description in his opening sentence… moronic theocrat, disgraced demagogue, corporate villain, states-right racist….. whomever could he be referring to?

  4. Meta
    Posted March 18, 2012 at 9:03 pm | Permalink

    “And this President has shut down everything when it comes to energy independence in this country.”

    That was Republican National Committee Chairman Reince Preibus on Face the Nation today.

    As Energy Roundup reminds us, in reality our consumption of foreign oil has been dropping under Obama, and domestic production has been increasing.

    Meanwhile, U.S. reliance on foreign oil is at its lowest point since the Clinton administration, having dropped from 57% of total consumption in 2008 to 45% in 2011.

  5. anonymous
    Posted March 18, 2012 at 9:45 pm | Permalink

    Paul Krugman aslo addressed this a few days ago. Here’s the first part of his article, followed by a link to the rest of it.

    To be a modern Republican in good standing, you have to believe — or pretend to believe — in two miracle cures for whatever ails the economy: more tax cuts for the rich and more drilling for oil. And with prices at the pump on the rise, so is the chant of “Drill, baby, drill.” More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want.

    Thus Mitt Romney claims that gasoline prices are high not because of saber-rattling over Iran, but because President Obama won’t allow unrestricted drilling in the Gulf of Mexico and the Arctic National Wildlife Refuge. Meanwhile, Stephen Moore of The Wall Street Journal tells readers that America as a whole could have a jobs boom, just like North Dakota, if only the environmentalists would get out of the way.

    The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. For the truth is that we’re already having a hydrocarbon boom, with U.S. oil and gas production rising and U.S. fuel imports dropping. If there were any truth to drill-here-drill-now, this boom should have yielded substantially lower gasoline prices and lots of new jobs. Predictably, however, it has done neither.

    Why the hydrocarbon boom? It’s all about the fracking. The combination of horizontal drilling with hydraulic fracturing of shale and other low-permeability rocks has opened up large reserves of oil and natural gas to production. As a result, U.S. oil production has risen significantly over the past three years, reversing a decline over decades, while natural gas production has exploded.

  6. Posted March 19, 2012 at 7:18 am | Permalink

    The free market will solve everything, and it already is.

    What kills me about this argument over domestic drilling is that oil companies are not restricted to keeping oil supplies at home. If China or Japan offer a better price, they will gladly sell to them. Actually, this is already happening, The US is now exporting petrochemicals for the first time in years.

    I suppose Republicans would be happy to institute some protectionist scheme to keep supplies at home, but they’d still be insane if they think it would influence prices. Oil companies, being multinationals, would still peg the price of domestic oil to the world price. Regardless, the oil industry would balk at any such scheme.

    This is a non-issue. What we need are efficient cars that maximize use of a slowly dwindling and increasingly costly resource.

  7. Thom Elliott
    Posted March 19, 2012 at 8:12 am | Permalink

    Gas should be 20$ per gallon, so people will stop using it. We don’t need more efficent cars, more cars of any kind are the worst idea, every single new car produced is environmental destruction on a massive scale. What we really need is to find a way to live without raping the essence of the earth with horrific pollution machines that run on extinct animals, that’s what we need. This whole discussion is so blinded by modernism, to solve this horrific problem of technology we just need more technology?? WRONG. We need new ways of THINKING. And while I realize I’m shouting into an empty room, I just thought I’d mention it.

  8. Posted March 19, 2012 at 9:42 am | Permalink

    Thom, my friend, I suggest you go to a place where few people use cars, or any transport at all (outside of their feet).

    Everyone has their own organic farm and mostly eats vegetarian, even.

  9. Mr. Y
    Posted March 19, 2012 at 9:44 am | Permalink

    If we had a real free market, like the folks on the right keep saying they want so desperately, gas would be incredibly expensive, as oil companies would have to maintain private armies around the world. As it is, the American tax payers secure oil fields for them, and protect their assets and infrastructure. People who yell about the “free market” are morons. Hopefully we can at least agree on that much.

  10. Thom Elliott
    Posted March 19, 2012 at 10:14 am | Permalink

    I’ve been to some of those places Pete, I’ve visited the Chinese country side for instance, I don’t think I’ve ever suggested that what needs to occur would be desirable. The cost of modernity is too high for humanity or the earth to bear, and I’m not sure there will be any way to correct this dillema by human action either. I believe there will be a correction, but it won’t be desirable, it’ll be a scene-of-disclosure through being to beings, not the other way around. People need to try and apply their brains to this problem in paradigmatically different ways, seriously.

  11. Knox
    Posted March 23, 2012 at 12:57 pm | Permalink

    A Fox News anchor claims to have a plan that will bring down the price of gas by a dollar a gallon. He says that he can’t tell us, though, as it’s a secret.

  12. Bob
    Posted June 30, 2012 at 8:35 am | Permalink

    Your article here is full of diatribe, deception, poppy-cock and bull shit!
    …you are under much illusion yourself!
    Think for yourself… be friggin’ real, you dope…

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