President Obama: High Gas Prices

Gas prices are rising.  And the President’s numbers on how he’s handling the crisis are falling.  America doesn’t think that Obama knows what to do, much less is willing to do anything about it.

And now that the President is looking at an election just 8 months from now, his views and policies on the subject are fluid.  Whereas before he was FOR rising prices:

The drop in oil prices, I do think, makes the conversation about energy more difficult, not less necessary. More than ever, I think, a wholesale investment in transforming our economy — from retrofitting buildings so that they’re energy-efficient to changing our transportation patterns and thinking about how to rebuild our electricity grid — those are all things that we’re going to need now more than ever. But with people not paying $4 a gallon for gas, it means it drops on their priority list. And that makes the politics of it tougher than it might have been six months ago.

Predictably the President feels he’s better situated to affect the transition from fossil fuels to renewable fuels from the White House.  So, he sees a short term lie pivot as justifiable to the larger picture.  In fact, you can see the same attitude from the administration’s energy secretary.  Before prices were going up, he was FOR those prices going up.  Now that it could jeopardize his job, he’s way in favor of those prices falling.

But is he?

If, in fact, the administration were in favor of reducing the prices of gasoline, the administration would take steps that would reduce the price of gasoline.  This would include reducing the dependence the world has on the amounts of oil we get from unstable places.  Places like Iran, like Venezuela.  Like Libya.

Instead the administration ISN’T doing that  Obama is NOT increasing oil production where he can.  In fact, it might be that he’s reducing it.

This may not jive with recent Obama speeches in which he claims that America is producing more oil than ever.  That we’ve lessened our dependency on foreign oil:

Obama argued that the U.S. is producing more oil than at any time in the past eight years and has quadrupled the number of operating oil rigs.

It’s as if Obama has taken credit for that surge.  But is he right?  Has energy production increased in the lands that the Federal Government controlsThis data via Carpe Diem.

No

This report shows that total fossil fuel production on federal lands is falling, natural gas production on federal lands is falling, and oil production on federal land fell in 2011 ending two years of increase. Specifically the new EIA report shows:

  1. Fossil fuel (coal, oil, and natural gas) production on Federal and Indian lands is the lowest in the 9 years EIA reports data and is 6 percent less than in fiscal year 2010.
  2. Crude oil and lease condensate production on Federal and Indian lands is 13 percent lower than in fiscal year 2010.
  3. Natural gas production on Federal and Indian lands is the lowest in the 9 years that EIA reports data and is 10 percent lower than in fiscal year 2010.
  4. Natural gas production on Federal and Indian lands is the lowest in the 9 years that EIA reports data and is 10 percent lower than in fiscal year 2010.
  5. Coal production on Federal and Indian lands is the lowest in the 9 years of data that EIA reported and is 2 percent lower than in fiscal year 2010.

 

Year over year, production has DECREASED on lands Obama controls:

That’s double digit reductions in both oil and natural gas.  Comparing 2010 to 2011.  If Obama REALLY wanted to reduce gasoline prices he would ACT like he wants to reduce prices.  Rather, he’s acting exactly like he said he would.  Namely by reducing the supply in order to raise the price to drive renewable energy buy-in.

 

 

5 responses to “President Obama: High Gas Prices

  1. First, Obama’s numbers are NOT falling — the trend is positive:
    http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

    Second, oil prices are set on global markets, very little of what we do here can make a difference. Gas prices are one thing that’s out of the President’s hands, even if we drilled EVERYWHERE. He can generate a short term drop by releasing the strategic oil reserve, but that will help for weeks, not months.

    • Obama’s numbers are NOT falling — the trend is positive

      Not related to gas prices:

      Nearly two-thirds of Americans say they disapprove of the way the president is handling the situation at the pump, where rising prices have already hit hard,” the Post reports. “Just 26% approve of his work on the issue, his lowest rating in the poll.

      Second, oil prices are set on global markets,

      Agreed. And the last two spikes were due to instability in Libya and oil moving through the Straights. Reduce the ratio of each and you impact the price.

      Gas prices are one thing that’s out of the President’s hands, even if we drilled EVERYWHERE.

      This is not true. He is reducing the amount of energy we produce on lands he controls. Obama WANTS the price to rise.

  2. I want the price to rise ultimately, but not now — and I’m sure Obama and his economic team agree. Not because of the election but because the global economic recovery, which is real, is in a fragile state right now. Gas price increases risk global instability. I expect a coordinated effort to try to prevent that, but even working together world leaders can only do so much (and they shouldn’t act too soon — they need more evidence that the recovery is in danger). Ultimately, incentives matter, as you say. The incentive should be to have people invest in alternatives and not rely on oil/gas. If you disagree with me about the nature of remaining reserves you’ll disagree with that claim, of course.

    Point taken that people aren’t satisfied with how he’s handling gas prices — it goes with the territory, he may not be able to change prices too much, but he’s at the top, the buck stops there! I wonder where we’d be if it hadn’t been such a warm winter.

    • I want the price to rise ultimately, but not now

      This is Obama’s view as well. He wants the prices to rise. He’s totally bummed by the discovery and extraction of cheap and affordable reserves of oil, shale and natural gas.

      He’s suffering from a common industry failure; Blindness of Outcome.

      He is so sure that his solution is the only “way forward” that he won’t seriously entertain any other idea. He is convinced that “Global Warming” means “Catastrophic Global Warming” and that we have to take action or the world will suffer massive and devastating consequences. Virtually no one thinks this.

      The incentive should be to have people invest in alternatives and not rely on oil/gas.

      I suspect that our ultimate “alternative energy” hasn’t yet been thought of. Luckily, we have nearly 100-200 years of fossils to think about.

  3. Scott,

    ” Second, oil prices are set on global markets, very little of what we do here can make a difference. Gas prices are one thing that’s out of the President’s hands, even if we drilled EVERYWHERE. He can generate a short term drop by releasing the strategic oil reserve, but that will help for weeks, not months. ”

    We have the short term and the long term. Short term you are absolutely right. Long term you could not be more wrong. Between now and election time, nothing Obama does will affect oil prices. However if he had not wasted 3 years in stupid money wasters like the Chevy volt and Solyndra, we would be 3 years closer to not being at the mercy of world oil prices. Like if your guys had not killed Anwar, that oil would be replacing middle east oil in our gas tanks right about, , , , now.

    Texas crude has been 10 dollars cheaper than North Sea Brent for awhile. The fact that the US does produce a lot of oil makes us better off than Europe. The more we produce, that frees up supply for others and lowers their costs. Plus that is more US dollars staying here, instead of causing a bigger trade deficit. The benefits of producing more US crude just never stop.

    If you want to know where America is heading all you have to do is watch Jim Cramer’s show. I knew 5-6 years ago about Marcellus Shale because Cramer profiled the drillers as investments. I knew about the oil bonanza in North Dakota long before the regular news media ever heard about it. Cramer is predicting that we will move towards nat gas cars and vehicles in the coming years. It is inevitable because of the abundance and cheapness of American nat gas.

    The only question continues to be, how many more years will go by until natural gas competes enough with diesel and gasoline to make transportation much cheaper. Truck fleets will be the first to begin switching over and building out infrastructure . The funny thing is that Obama was actually in favor of subsidizing this and it was my Conservatives who killed it. Now no subsidies, even good ones can get anywhere because of the way Obama squandered his political capital on Green, instead of something that actually would have worked like Natural Gas as a transportation fuel .

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