published Sunday, March 18th, 2012

Obama aggravating high gasoline prices

Gasoline today costs about double what it cost when President Barack Obama took office a little over three years ago.

Yet it is not clear just how high the price of a gallon of gas will have to go before the president recognizes that his energy policies are undercutting economic recovery and making it harder for the American people to make ends meet.

The pain of high gasoline prices is not merely the sticker shock you feel when you fill your tank. That's because rising fuel prices also mean vastly higher costs for shipping goods. The milk, eggs, meat, produce and everything else you buy at the grocery store have to be hauled there. When gasoline goes up, that increases the price you pay for other items. So even if you exercise thrift by doing things such as carpooling or reducing discretionary driving, higher gas prices still find a way to lighten your wallet or pocketbook.

Yet the president's actions make it woefully clear that he is out of touch with the day-to-day economic concerns of ordinary people. In fact, those actions read like a virtual recipe for gasoline prices that have soared above where they were just a year ago -- and that are expected to exceed $4 per gallon soon.

The most notable bad decision by the president in recent months was his rejection of the Keystone XL pipeline, which would have brought Canadian oil to U.S. refineries in Texas.

In addition to boosting our oil supply from a friendly country, the pipeline project would have created potentially tens of thousands of U.S. jobs. But the president rejected it to please his environmental extremist friends -- even at the risk of alienating some of his labor union allies, who were hoping to get the work.

The president also has put off for at least five years any consideration of drilling for oil off our Atlantic Coast, and he will not compromise on his opposition to drilling off the Pacific Coast. By contrast, Republicans in Congress proposed legislation that would open up drilling off our coasts and in part of a frigid, mostly unpopulated area of Alaska.

The Heritage Foundation notes that the United States is "the only country in the world that places a majority of its territorial waters off-limits to oil and gas exploration. Removing the de facto moratorium on drilling would immediately increase supply, create jobs, and bring in royalty revenue to federal and state governments."

What makes the president's and congressional Democrats' resistance to domestic production of oil even more exasperating is that instability overseas is also currently affecting gas prices.

Troublesome Iran is making hostile moves in the oil-rich Persian Gulf region which are creating tension and driving up oil prices. While the U.S. Navy could undoubtedly respond with overwhelming force if Iran followed through with its threat to close the important Strait of Hormuz, such a confrontation would add even more instability -- and make oil prices skyrocket.

This is precisely the time when the president and Congress should be moving full speed ahead to develop our domestic energy resources, not to keep them off limits and keep us dependent on nations that are hostile or unstable.

On a visit to Miami, the president criticized the Republicans' plan as "Step one is drill, step two is drill, and step three is keep drilling. ... We've heard the same thing for 30 years."

But if years ago we had begun the responsible, environmentally safe drilling of which our country is clearly capable, we would not be facing $4-plus gasoline prices.

Why should we wait any longer before we begin to make use of the energy that we can produce right here at home?

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nucanuck said...

If Obama were responsible for the high price of oil, then he would be responsible for raising that price all over the world.

We pay world prices for oil whether it comes from Oklahoma, Venezuela, Nigeria or Canada. No company wants to sell oil for less in the US to be patriotic. If we drill all of our reserves, there would still be almost no impact on world prices because we only have about 3% of the world's reserves.

The only way oil prices might to fall would be with falling world demand. Us oil demand has been falling for almost three years while world demand has been expanding. This is an unstoppable trend. New discoveries have lagged consumption for thirty years and the large old well fields are slowing with age and depletion. 1.5 billion people have been consuming most of the world's oil for the last century. Now several billion more are developing an appetite for oil.

We have known for years that demand would someday exceed supply. That's the way exponential growth works. We could've prepared for the inevitable. President Carter tried to get Americans to prepare for what we now face. We didn't want to hear the message and we put him out to pasture. Now we are beginning to see the effects of price rationing. If the supply gets tighter the price will rise until demand falls to meet supply because supply is pushing up against the upper limits of what is possible.

Depletion rates are accellerating faster than production growth and that is a permanent condition. Complaining won't help.

Obama is a very smart and capable man, but altering the dynamics of the world's oil supply and demand will need devine intervention.

March 18, 2012 at 1:54 a.m.
acerigger said...

nucanuck ,dam u & yer facts!

Don't u know THE election is coming & we gotta get OBAMARAMABAMBOOZLERMUZZIEKENYANNAZIBOZO out of the WHITE HOUSE & yes,he does too control gas prices&&&&!!!

Well,you know.

March 18, 2012 at 2:27 a.m.
Rickaroo said...

Hmmm....funny but I don't recall Republicans or other right wing ideologues ever once blaming Bush for the high gas prices during his years in office. It sky rocketed to well over $4/gallon in 2007. I guess that, like deficits don't matter when Republicans serve, gas prices don't matter then either. I suppose high-priced gas and deficits are uniquely the fault of only Democratic presidents. Must say so in the Bible somewhere.

March 18, 2012 at 2:54 a.m.
joneses said...


Funny how you disgusting liberal fools blamed president Bush for the high price of gas while he was in office by spouting lies that he was in bed with the oil companies. Well now we have gas prices under this fool you support as president being twice as high and you give him a pass. You are just another disgusting liberal, hypocritical liar. The failed liberal environmental policies play a big part in the high prices of gas and this fool you worship is playing his part in it as well.

March 18, 2012 at 6:07 a.m.
EaTn said...

Big oil companies made over a $100 billion profits last year and didn't pass any of it onto the consumer. With gas prices rising their profits are likely to be higher this year. Why should we as drivers and tax payers continue to supplement their tax breaks?

March 18, 2012 at 6:41 a.m.
conservative said...

Supply and demand, supply and demand - no mater how many times one explains it, some just can't get it. When the demand goes up relative to the supply the price goes go up and when the supply goes up relative to the demand, the price goes down. It is a law of economics, a law Lieberal have successively prevented their sheep ( sheep are dumb ) from understanding.

The world demand for oil is exceeding the supply of oil due to the lack of drilling for oil. It is not complicated.

March 18, 2012 at 8:55 a.m.
mymy said...

This report is from a Wall Street Journal article:

As gas prices rise, no relief in sight at pump “Refineries in the Northeast are under financial pressure for two reasons. They have limited access to cheaper, high-grade crude oil produced in the middle of the U.S. because there are not enough pipelines, which is forcing them to pay more for oil from elsewhere, most of it from overseas. And many of their facilities aren't set up to process lower-grade crude that is cheaper. As Northeastern refining capacity declines, it will force distributors in the region to buy gasoline from elsewhere, pushing up prices across the country and increasing the likelihood of price spikes, government officials and analysts warn. "There's now going to be a question if we can get enough gasoline into the East Coast for summer," said David Greely, an energy analyst at Goldman Sachs Group Inc. The U.S. Energy Department has warned a shortfall could develop as early as July.”

Read more:

March 18, 2012 at 9:05 a.m.
rick1 said...

EaTn said, Big oil companies made over a $100 billion profits last year and didn't pass any of it onto the consumer.

Oil companies are like any other business they need to make a profit to survive or they will not be in business. If you own your own business would you send me some of your profits? Please explain what you mean by that? Does that mean every company should hand ove their profits to us?

Rickaroo, I guess you forgot what Nasty Pelosi said about the high gas prices under Bush:

May 2007, “Drivers are paying a heavy price for the Bush administration’s failure to enact a comprehensive energy strategy."

This what Pelosi said on Marh 1, 2012 about the currrent situation with high gas prices:

“Supply is up. Demand is down, you would think the price would come down. Enter the speculators,” Pelosi said on March 1, 2012.

March 18, 2012 at 9:13 a.m.
Plato said...

According to a recent report by six Federal agencies, the United States reduced net imports of crude oil last year by 10%, or 1 million barrels a day. The U.S. now imports 45% of its petroleum, down from 57% in 2008, and is on track to meet Obama’s long-term goal.

Imports have fallen, in part, because the United States has increased domestic oil and gas production in recent years.

U.S. crude oil production increased by an estimated 120,000 barrels a day last year over 2010, the report says. Current production, about 5.6 million barrels a day, is the highest since 2003.

BTW the Keystone Pipeline is an export project. The oil is destined for export to Europe and Asia and will have no effect on US gasoline prices at the pump.

March 18, 2012 at 10:19 a.m.
rick1 said...

Plato said BTW the Keystone Pipeline is an export project. The oil is destined for export to Europe and Asia and will have no effect on US gasoline prices at the pump.

How many jobs would have this pipeline created in this country? How much revenue would have been made from the taxes collected for the workers and businesses associated with the pipeline? Just for an econmic reason alone we should have approved this pipeline.

The increase in oil production in this country has occurred on State land where the Federal government has not authority. Oil production on federal land has decreased dramactically since Obama took office.

March 18, 2012 at 10:36 a.m.
EaTn said... and demand were the economic factors when I and probably you were studying economics 101 in college. Times have changed considerably since then. The new economics 102 factors are supply, demand, regulations and speculation.

March 18, 2012 at 11:46 a.m.
nucanuck said...

con-man, your comment at 8:55 makes it appear that you failed to consider the finite amount of easy to access oil and the ever rising cost of extracting hard to access oil. You should have read the next chapter about supply and demand, so we sheep wouldn't have to teach you.

March 18, 2012 at 1:01 p.m.
Plato said...

rick1 - the Keystone pipeline is not dead, it just has to comply with the environmental impact study which will take some more time. So there is no net job increase or decrease by waiting another 9 months or so to get the plan finished. The actual number of jobs created would be a few thousand, mostly in temporary construction jobs. The risk/reward situation, which is building this before the environment impact is finished risking contaminating municipal fresh water supplies is not worth the reward of getting a few thousand jobs 9 months earlier.

The point of the editorial was not Keystone jobs it was about Keyston's effect on national gasoline prices which as I said is zero.

You're previous comment about how oil prices are created on the world futures and spot markets is spot on, but I find it ironically that you only mention liberal sheep not understanding that when it's evident that conservative sheep including the FP Editor who wrote this piece also don't understand it (or chose to avoid it)

March 18, 2012 at 1:16 p.m.
conservative said...

ConNuck.....The fallacy in your thinking is that things have not changed in the last three years to where we are at the "hard to access oil" as you put it. We know there is easy oil in the gulf, guess who put a moratorium on that.

March 18, 2012 at 1:54 p.m.
conservative said...

EaTn......... One can not separate regulation from supply. That moratorium for one is regulation which affects supply which in turn affects price and speculation.

Virtually every day there is a headline on Yahoo Finance, Wall Street Journal, The Bloomberg Business and Finance Report, IBD, and Barrons to name some why the price of oil went up or down that day. If the world economy is deemed to be picking up the price of oil goes up due to the increased demand relative to the supply of available oil.

March 18, 2012 at 2:35 p.m.
nucanuck said...

con-man, check on what difference our 3% of reserves would make in world oil prices. You will find that you are spitting in the wind.

March 18, 2012 at 3:23 p.m.
rick1 said...

Palto, the environmental studies were completed over 3 years ago and in August 2011 the State Department supported the project.

In regards to your comment that "there is no net job increase or decrease by waiting another 9 months or so to get the plan finished." I'm sure the millions of people who can not get a job will understand this. Also your comment of "the actual number of jobs created would be a few thousand, mostly in temporary construction jobs." It is being reported this project would create 20,000 temporary jobs, which is a lot better than the shovel ready jobs Obama said would be created with his stimulus. Remember Obama laugh later when he said those shovel ready jobs were not so shovel ready. The Canadian Energy Research Institute estimates the pipeline would create 179,000 American jobs by 2035.

This just shows with Obama delaying this pipeline until after the election Obama does not care about the American people he only cares about pandering to his politicial groups.

March 18, 2012 at 3:51 p.m.
conservative said...

ConNuck....Your repitition of 3% of the of reserves along with your "record profits" by oil companies are just more indicators of how Lieberals have made sheep of youself and others.

Here is a recent headline and the website. I am providing this for you so that you will know the truth and that you may see how Lieberals will use people and get them to repeat their lies.

Scarce Oil? U.S. Has 60 Times More Than Obama Claims

March 18, 2012 at 4:13 p.m.
Plato said...

rick - The initial Environmental Study was completed across the old proposed route that went across aquifers that serves 8 states with fresh water. That's why that route was not approved - for the most part at the urging of the state of Nebraska. Approval of the new route is not expected until the first of next year.

In 2008, TransCanada’s Presidential Permit application for Keystone XL to the State Department indicated “a peak workforce of approximately 3,500 to 4,200 construction personnel” to build the pipeline. Jobs estimates above those listed in its application draw from a 2011 report commissioned by TransCanada that estimates 20,000 “person-years” of employment based on a non-public forecast model using undisclosed inputs provided by TransCanada. According to TransCanada’s own data, just 11% of the construction jobs on the Keystone I pipeline in South Dakota were filled by South Dakotans–most of them for temporary, low-paying manual labor.

The 179,000 number is misstated. That number came from a report that included all the Tar Sands from current operations in Alberta, plus future proposed projects and Keystone all added together. Keystone is only one small part of that.

We learned (or should have learned) from the BP spill the cost of taking short cuts to save time and money. Hopefully we do not repeat those mistakes for a few thousand temporary jobs.

March 18, 2012 at 4:19 p.m.
Plato said...

Con - the oil number you cite is highly inflated based on tar sand oil and shale which is not liquid oil, and depends on a much more expensive and energy consuming process of extrication. Oil developed this way has to fetch a high price to reach break even - in the $75/barrel range.

There is estimated to be about 85 billion barrels of liquid oil that could be extracted from the outer continental shelf, and the president addressed this in November of last year:

"The Obama administration on Tuesday announced its five-year offshore drilling plan, which includes an emphasis on drilling in the Gulf of Mexico and Alaska, continuing the administration's policy of expanding domestic production of energy.

Less than two years after the BP oil disaster, the Proposed Outer Continental Shelf Oil and Gas Leasing Program will make more than 75 percent of oil and gas resources that are undiscovered and technically recoverable now available for exploration and development.

Department of the Interior Secretary Ken Salazar praised the program as an important step toward economic recovery."

March 18, 2012 at 4:35 p.m.
conservative said...

Plato..."A separate Rand Corp. study found that about 800 billion barrels of oil shale in Wyoming and neighboring states is "technically recoverable," which means it could be extracted using existing technology. That's more than triple the known reserves in Saudi Arabia."

"All told, the U.S. has access to 400 billion barrels of crude that could be recovered using existing drilling technologies, according to a 2006 Energy Department report."

Note the words "using existing drilling technologies"

March 18, 2012 at 4:54 p.m.
nucanuck said...

EROEI, con-man, EROEI. The reserves you talk about might as well be on Mars if it takes as much energy to extract it as it produces. Feasible and viable are pulling in different directions.

March 18, 2012 at 5:42 p.m.
EaTn said...

For all the comments regarding politics has nothing to do with the price of gasoline, would anyone care to speculate why in mid-2008 the price was at near a record high then dropped about 25% in the six months before election in November?

March 18, 2012 at 6:02 p.m.
conservative said...

ConNuck..... That is a pitiful strawman you constructed - "if it takes as much energy to extract it as it produces"

As much as you hate the oil companies, I would think you you be delighted to see them use a barrel of oil to extract a barrel of oil.

Thanks for the laugh.

March 18, 2012 at 6:41 p.m.
rick1 said...

EaTn, in the summer of 2008, Bush issued an excutive order repealing his fathers privious order against off shore drilling. This was part of the reason oil dropped $6.00 a barrel.

March 18, 2012 at 7:01 p.m.
PinkSalmon said...


Why high gas prices:

In February 2012, concerns about a potential military action, by either Israel or even the U.S., against Iran caused high oil prices. Second, some oil refineries in the U.S. were closing, according to an EIA report. Third, oil and gas prices tend to rise every spring, in anticipation of increased demand during the summer driving vacation season. As a result, gas prices hit the benchmark $3.50 a gallon by February 15, two weeks earlier than in 2011. By early March, the national average had jumped to $3.71 a gallon. That's because the price of oil reached its benchmark of $100 a barrel two weeks earlier, as well. Oil went on to hit $109.77 by the end of February, before dropping slightly to $106.55 in early March. (Source: EIA)

When Else Have Gas Prices Been High?:

In April 2011, fears about unrest in Libya and Egypt sent oil prices up to $113 a barrel. In May 2011, as oil prices dropped, gas prices stayed high. Why? Commodities traders were concerned about refinery closures due to the Mississippi River floods.

In the summer of 2008, gas prices rose to $4 a gallon as oil prices skyrocketed to $145 a barrel, even though demand and supply were fairly constant. In summer of 2009, gas prices again rose, despite the recession, which decreased demand. Commodities traders were the reason for both. Gas prices also usually rise during the summer vacation season, as driving increases. Finally, gas and oil prices also increase whenever there is concern about surging demand from China and India, or a curtailment of oil supply.

Oil prices are set by commodities traders who buy and sell futures contracts on the commodities exchanges

My suggestion is to USE THOSE BI-LO Bonus Gas Points!! I did and ended up paying less than $2.50 per gallon for gas.

March 18, 2012 at 11:52 p.m.
Holland042 said...

Gas prices have always been a huge issue for us in the United States. You really don’t realize just how much it affects not only you but the economy the more the prices go up. Like stated in the article, the more as goes up, the more daily needed products go up. Everyone talked about how great President Obama was going to be and how he was going to fix all of these problems. It’s interesting to me how he would make these promises but then deny help from a close, friendly country. This not only could’ve solved a huge issue of tons of people with no job, but it also could’ve saved us all so much money on not only gas, but ordinary products. The economy has already been extremely tough on many people for so long, the last thing we all need is for the gas prices to continue to rise. I know that many presidents have also promised things in the past and haven’t held up on their end of the deal but when a solution is handed to you and would help your country tremendously I just don’t quite understand how he couldn’t accept the help.

April 4, 2012 at 2:39 a.m.
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