The Persistent Myth Of Obama's Role In High Gasoline Prices

The Persistent Myth Of Obama's Role In High Gasoline Prices

recently quoted in an Austin American-Statesman post fact-checking a claim by Roger Williams, a Republican congressman from the Austin area. In a recent newsletter to constituents, Williams claimed that “the liberal anti-free market policies of the Obama administration discourage the exploration of American sources of energy and hinder production and job growth.”

This has been a popular refrain among Republicans because, as Williams correctly pointed out in his July 1 letter, average gasoline prices have increased 86 percent since January 2009 – to $3.51 from $1.89. The reasoning goes something like this: Gas prices have risen, Obama is president, therefore Obama is to blame for the price increase.

It’s Swiss cheese logic that ignores several basic facts. For starters, oil isn’t a free market. Prices are controlled by a cartel.

What’s more, presidents have almost no influence on pump prices. Obama entered office when gasoline prices were depressed by the recession, so much of the rise is actually a sign of an improving economy. In other words, had prices not risen, it would mean the country overall was in worse shape.

Pump prices are influenced by the global price for crude oil, as well as by refining-related issues such as maintenance and outages, and seasonal driving demand. Obama’s policies have no short-term impact on those factors.

Ethanol blend requirements have a slight effect on pump prices, but they can’t account for the recent run ups.

As I point out in the Statesman’s post, increasing North American production could have a longer-term influence on prices, but probably not a significant one. Global energy demand from emerging markets such as China and India is likely to drive global prices up, not down. The Republicans have long argued that Obama should open the Arctic National Wildlife Refuge, approve the Keystone XL pipeline and lift restrictions for drilling off the shores of Alaska.

Yet even doing all those things will have little impact on global crude prices. They matter more because they help the U.S. ensure a domestic supply of crude as global demand — and prices — rise.

More important, Williams’ claims simply ignore reality. Whether Obama’s policies are anti-free market or not, U.S. domestic oil production has surged under his administration. In fact, it’s increased more than under any president, Republican or Democrat, in at least 40 years.

If domestic production were the key to prices, gasoline prices should have been falling years ago. Instead, they’re going up steadily, even as production rises from shale drilling and increased activity in the Gulf of Mexico.

Williams and other Republicans can blame Obama, but that will only last so long. It’s time to stop embracing the myths of cheap politics and start working on a bipartisan energy strategy. I know, I know. But it’s no more of a fantasy than laying gasoline prices at Obama’s feet.

cmack 4,136

The Persistent Myth Of Obama's Role In High Gasoline Prices

recently quoted in an Austin American-Statesman post fact-checking a claim by Roger Williams, a Republican congressman from the Austin area. In a recent newsletter to constituents, Williams claimed that “the liberal anti-free market policies of the Obama administration discourage the exploration of American sources of energy and hinder production and job growth.”

This has been a popular refrain among Republicans because, as Williams correctly pointed out in his July 1 letter, average gasoline prices have increased 86 percent since January 2009 – to $3.51 from $1.89. The reasoning goes something like this: Gas prices have risen, Obama is president, therefore Obama is to blame for the price increase.

It’s Swiss cheese logic that ignores several basic facts. For starters, oil isn’t a free market. Prices are controlled by a cartel.

What’s more, presidents have almost no influence on pump prices. Obama entered office when gasoline prices were depressed by the recession, so much of the rise is actually a sign of an improving economy. In other words, had prices not risen, it would mean the country overall was in worse shape.

Pump prices are influenced by the global price for crude oil, as well as by refining-related issues such as maintenance and outages, and seasonal driving demand. Obama’s policies have no short-term impact on those factors.

Ethanol blend requirements have a slight effect on pump prices, but they can’t account for the recent run ups.

As I point out in the Statesman’s post, increasing North American production could have a longer-term influence on prices, but probably not a significant one. Global energy demand from emerging markets such as China and India is likely to drive global prices up, not down. The Republicans have long argued that Obama should open the Arctic National Wildlife Refuge, approve the Keystone XL pipeline and lift restrictions for drilling off the shores of Alaska.

Yet even doing all those things will have little impact on global crude prices. They matter more because they help the U.S. ensure a domestic supply of crude as global demand — and prices — rise.

More important, Williams’ claims simply ignore reality. Whether Obama’s policies are anti-free market or not, U.S. domestic oil production has surged under his administration. In fact, it’s increased more than under any president, Republican or Democrat, in at least 40 years.

If domestic production were the key to prices, gasoline prices should have been falling years ago. Instead, they’re going up steadily, even as production rises from shale drilling and increased activity in the Gulf of Mexico.

Williams and other Republicans can blame Obama, but that will only last so long. It’s time to stop embracing the myths of cheap politics and start working on a bipartisan energy strategy. I know, I know. But it’s no more of a fantasy than laying gasoline prices at Obama’s feet.

cmack 4,136