Ah, how times change
Rising gas prices are always a bad thing for an incumbent president, especially one heading into a tough re-election battle.
But President Obama admitted in a speech in Miami recently that there’s not all that much he can do to blunt the impact of prices, which some analysts think could be heading toward $5 per gallon nationwide this summer.
“The amount of oil that we drill at home doesn’t set the price of gas by itself,” Obama said. “The oil market is global. Oil is bought and sold in a world market. And just like last year, the single biggest thing that’s causing the price of oil to spike right now is instability in the Middle East— this time, around Iran. When uncertainty increases, speculative trading on Wall Street increases, and that drives prices up even more.”
See, when Obama’s President, it’s always Someone/thing Else’s Fault. And, let’s be honest, Obama can only have so much of an effect, there are market forces that happen that are out of his control. That wasn’t the case when Bush was POTUS.
There are two tactics readily available to presidents to blunt the impact of rising gas prices: release oil from the Strategic Petroleum Reserve and try to limit the ability of oil “speculators” to drive up the price of oil in futures markets.
The problem for Obama is his administration has already done both of those things.
In June, the Obama team released 30 million barrels from the reserve, citing ongoing unrest in Libya as a factor that was then driving up gas prices. At the time, gas was averaging $3.61 for a gallon of regular gasoline nationwide, according to AAA. Today, the price is $3.74.
Just two? How about increasing supply here at home? While prices may be “global,” there are also local pricing, and, if domestic production increased significantly, the prices at home would drop. That’s why prices are low in major producer countries. Build new refineries, which, as a by product, would be much more environmentally responsible than the ones we rely on now that were built 40+ years ago. And more efficient.
What’s more, excessive oil speculation can be a tricky thing to prove. The last time oil speculation was blamed for driving up gas prices, in 2008, a federal inter-agency task force was unable to find evidence that the speculators were to blame at all.
One of the measures of a leader is how they respond to Things Going Wrong. Obama’s idea is to talk about algae and lowering energy prices sometime a few decades down the road.