Green Update: Rising Gas Prices Become Political Football

February 21st, 2012

retail gas prices

The hot topic is once again the cost of gas and how it’s rising. This occurs every summer, and particularly in summers before presidential elections, as happened to G.W. Bush.

Well, gas prices are going up again, approaching $4.00 in some parts of the country. And they will likely go higher and hurt much more. Gas-pump anger is rising.

You could blame the disruptions in Iran, Syria and other Middle East trouble spots. You could blame the oil companies. You could blame Obama, and the Republicans are coming out in force to do that.

Newt Gingrich is the loudest, of course: Obama’s energy policy has been “outrageously anti-American.” Rick Santorum is the craziest: Obama’s “radical environmentalist policies” are what’s driving up the price of gas.

It reminds me a little of the drug problem. The U.S. generates tremendous demand for drugs, so when the supply chain gets disrupted or corrupted and people die, as in Mexico, the “costs” rise to everyone. So it is with gasoline and oil. The blame and finger-pointing about gas prices considers everything but the real source of the problem: the world’s incessant, exorbitant and growing demand for gas and oil.

oil refineryThe Democrats haven’t faced up to the problem either. Mr. Obama’s environmental initiatives have been almost nonexistent, and he wants to drill more when that will have only minor impact on the supply. The Keystone pipeline will not make any real difference in the price of oil: It’s destined for the world market.

What will make a difference is something that one commenter (can’t remember where I saw this) proposed in response to yet another puff piece on this subject. He suggested breaking up the oil companies, like the government did some years ago with AT&T. The problem with that, of course, is that they are now global.

Obama has waffled on hitting the oil companies hard for their share in the problem, and the booming export market also drives the price higher. There isn’t much he can do about the Middle East, and his opponents are jumping all over his efforts to promote greener cars. The car companies, however, are going all-out for EVs and hybrids.

As they used to say, “Charity begins at home.” One GeneM made this comment on the NY Times story quoted above:

I have a friend who gets apoplectic when gas prices go up. He blames it on conspiracies of the gas companies and high government taxes. Now, I guess he will start blaming Obama.

Of course he drives a Chrysler V-8 pickup that gets 11 mpg on a good day.

How about a simple price freeze on gasoline and diesel if they reach a certain level? Would that work?

—jgoods

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  1. Jim Redd
    | #1

    What would that prize freeze be? $4? $5? More? A prize freeze would make people happy, if it were low enough, but do little to inspire cutting back the use of gasoline, which is ultimately the best way to lower the price.

  2. Randy
    | #2

    I’m not sure why the same rationale that allows the feds to operate the stragegic oil reserve would allow them to build a refinery in the middle of the country, say St. Louis. That would solve the undercapacity issue and allow the government to break price manipulation by the oil companies. Unfortunately, given our government’s reputation for honest management and efficiency, gas coming from such a facility would probably cost $50 a gallon and be 90% hot air.

  1. | #1
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