Obama Distorts Reality on Current Gasoline Prices

Barack Obama is concerned that skyrocketing gasoline prices leading into summer could have a major negative effect on his electability in November.  Obama and his staff have always been in favor of US gasoline prices approaching $10 per gallon, as they are in Europe.  However, Obama realizes prior to the General Election is the worst time for any of his Socialist wishes to come true.

When speaking in Miami last week, Obama tried to shift the blame for higher gasoline prices to others.  I suggest reading his entire speech.  However, Obama’s essential message regarding higher gasoline prices was,

So what does this mean for America?  It means that anyone who tells you we can drill our way out of this problem doesn’t know what they’re talking about – or isn’t telling you the truth.  The United States consumes more than a fifth of the world’s oil.  But we only have 2% of the world’s oil reserves.  That means we can’t just rely on fossil fuels from the last century.  We can’t just allow ourselves to be held hostage by the ups and downs of the world oil market.  We have to keep developing new sources of energy.  We have to keep developing new technology that helps us use less energy.  We have to keep relying on the American know-how and ingenuity that comes from places like the University of Miami.  That’s our future.  And that’s exactly the path we’ve been taking these last three years.

Nick Loris of The Heritage Foundation analyzes the five half-truths in Obama’s speech.  The following are encapsulations of what he wrote, which I recommend reading in full.

Half-truth #1: Oil production is the highest it has been in eight years. The increased production of oil and gas in the U.S. is largely a product of increased production on private land. The Administration could have encouraged much bigger gains by providing access to federal land.

Half-truth #2: Increasing oil production takes too long and would not impact the market for at least a decade. The sooner we make investments in domestic energy, the sooner those benefits will be realized. And with some serious reforms, some of this oil can reach the market in much less than a decade.

Half-truth #3: Oil is not enough. America has only 2 percent of the world’s oil reserves. President Obama frequently uses this number to push federal investments in alternative sources of energy that cannot stand the test of the market. The reality is that he uses this number deceptively.

Half-truth #4: Oil is not enough. The country needs an “all-of-the-above” approach to reduce its dependence on oil. While a familiar refrain from the President, it is a line that too often translates into wasteful subsidies for pet energy projects. A market-based strategy is the only all-of-the-above approach.

Half-truth

#5: Speculators are driving up the price of gas, and they need to be reined in. While the President tries to blame the market, he ignores the power of supply and demand. By removing roadblocks to domestic energy production, the President can ensure that there is a healthy supply of American energy on the market, keeping prices competitive.

Loris goes on to recommend and discuss five simple logical steps Congress and Obama could do to lower gasoline prices.  They are,

•    Get moving on permits

•    Require lease sales when ready

•    Create a sensible review process

•    Remove regulatory delays and limit litigation

•    Approve the Keystone XL Pipeline

These suggestions do not include taking oil from our Strategic Petroleum Reserve, which is in place for emergencies.  This is not an emergency for most of us but it is for Obama.  Obama’s primary concern is the electability of Barack Obama in November.  The fear of potentially falling oil supplies due to Iran and other matters should prompt us to greatly enhance our exploration, our drilling, our production of oil, our pipeline construction, and our refinery construction.

We can count on Barack Obama to do two things.  Obama lies about the situation and then portrays himself as working for a solution to the problems that Obama claims were created by George W. Bush and other Republicans.

  • Comment
Comments (66) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
17
5

@May It's perfectly clear.....

May, it's perfectly clear by your nonsense blog, that you know nothing about the oil business.

Oil produced in the United States is put on the Global Oil Market. Do you understand the word GLOBAL. That means no matter where you are, if you have oil to sell, you can sell it to anyone else at the market price. The price of oil is based on the complete inventory of oil available now, and what is projected to be available in the near future wherever it comes from. Got that part, May?

Oil sales in the Middle East are controlled by OPEC. They control the amount of oil they sell at any given time. They have significant reserves to sell. The United States does not have an OPEC like setup and I am not suggesting that they do. Oil producers can sell their inventory for what they choose to sell it, when they are ready to sell it. That is called "free market", which you support.

The bottom line is that increased oil production in the United States does not guarantee that gasoline prices will go down. The oil pumped through the Keystone XL pipeline belongs to Canada. Canada will be free to sell it to the highest bidder. It will have zero effect on our gasoline prices.

If the other four measures that Nick Loris suggests were put in place tomorrow, it would not have an immediate impact on gasoline prices, and even in the long term would have little impact on gasoline prices.

And who is Nick Loris?--well someone from the Koch brothers Heritage Foundation, of course. And what is his experience in the oil business? Tell you what visit http://www.heritage.org/about/staff/l/nicolas-loris and see if you think this person can tell the United States how to run the oil business. He appears to be about 26 years of age in his picture. Before coming to Heritage, he worked for the Charles Koch Foundation. Hello?

The only lies are coming from you, cons like you, and the Heritage Foundation. It is consistent with your I hate Obama campaign.

16
5

@May George Will

May is George Will a conservative or not? That can be answered "yes" or "no"

George Will is a conservative for whom I have respect, and don't always agree with him. It's too bad that the A-J is too cheap to carry his column.

And, you might want to watch the video....

George Will calls GOP anti-Obama gas price strategy ‘economic nonsense’ [VIDEO]

Read more: http://dailycaller.com/2012/02/26/george-will-calls-gop-anti-obama-gas-price-strategy-economic-nonsense-video/#ixzz1nep0cmcH

5
20

Obviousman, be careful what you ask for

You suggest we can buy all of our oil on the World market.

You also have suggested that we cut the size of our Navy.

With increased oil tanker traffic to the United States in combination with a decreased Navy, it seems to me that piracy and the ransoming of oil tankers to the United States might become a profitable business? I wonder how much the pirates would donate to Obama?

18
4

@May Duh!

May, I didn't say that we buy all of our oil on the Global Market, What I said is that we pay Global Market prices no matter where we buy it.

If some oil producer in West Texas has 1,000 barrels of oil to sell, and China offers $120 per barrel and the highest United States offer is $118 per barrel, which offer do you think would be accepted.

That is why we export oil. We are selling it to higher bidders. That is the free market economy, and it applies to petroleum products.

I have never posted anything anywhere that said that we need to decrease the size of our Navy. You are imagining things, again.

16
4

The Keystone XL pipeline

Here is an excellent article to review:

"Why the Keystone pipeline would boost pump prices"

"Rising gasoline prices have helped proponents of a controversial pipeline proposal press their case that the project would help ease supply bottlenecks and lower prices for consumers.

They’re half right.

The proposed pipeline would relieve a glut of crude oil backing up in the Midwest and redirect those barrels to Gulf of Mexico ports. From there they could be shipped to world markets and repriced at higher global prices.

But that likely would mean higher prices for drivers in the nation's midsection, who currently are enjoying an unusual discount stemming from a lack of pipeline capacity.

On Monday, TransCanada Corp., the company that wants to build the pipeline, said it would start construction of a southern leg while it tries to satisfy environmental concerns raised by the Obama administration that have blocked the longer northern leg.

Oil prices around the world have been rising steadily since October largely because of tightening sanctions on Iran being imposed by the U.S. and European countries over its suspected development of nuclear weapons.

"Basically, we're locked into what appears to be an end game with Iran in some form or another,” sad Dan Yergin, chairman of Cambridge Energy Research Associates. “The sanctions really start to kick in over the next several months, and the whole aim is to choke off Iran's oil revenues and that means choke off its exports."

The result is that pump prices have jumped 20 cents a gallon in the past month alone, according to data from the Energy Information Administration, and Republicans are beginning to use the energy inflation as a political talking point.

But the pain has been inflicted unevenly across the country, with consumers on the coasts paying much higher prices than those in the Midwest and Rocky Mountain regions, where supplies of oil are plentiful.

One reason crude is so plentiful in the Midwest is that new production technologies have boosted production in oilfields that were once thought to be exhausted or too costly to develop. After two decades of steady decline, total U.S. oil production began rising again in 2009, according to the EIA. Increased production from Canadian tar sands fields also has boosted Midwest supplies...."

Article continues at: http://bottomline.msnbc.msn.com/_news/2012/02/27/10519685-why-the-keystone-pipeline-would-boost-pump-prices

Reality is a bi*ch, isn't it May?

17
4

May, I know you refuse to be confused by facts, however,

here are a few........Experts say the effect of the Keystone XL on oil prices would be miniscule at best. The New York Times, reporters at CNN, Politico, ABC News, and the Associated Presshave all served as a vehicle for politicians to link the pipeline to rising gas prices. And of course, Fox News makes the claim outright on an almost hourly basis. Fox anchor Bill Hemmer said on Monday: "So long as gasoline is getting higher, that's all the Republicans have to say is 'Keystone.'" And that's from the purportedly "straight news" side of the network.

But does this claim have any merit?

Ray Perryman, the economist hired by TransCanada to assess the economic benefits of the pipeline points to an impact of "around 3.5-4 cents per gallon of gasoline at current prices" once the pipeline "was fully implemented and flowing close to capacity." Moody's economist Chris Lafakis estimates that "the pipeline would lower US gas prices by 1.6 cents per gallon."

For comparison, the U.S. average gasoline price has increased nearly 30 cents in the past two months. Perryman, a supporter of the pipeline, added: "I should also point out that a modest change of this nature will often be swamped by the day-to-day factors that impact market prices."

Analysts say gas prices are currently rising due to expectations of global economic growth, concerns about Iranian threats to disrupt oil supply and an influx of SPECULATORS!

Energy economist Severin Borenstein, a professor at the Haas School of Business, believes the pipeline "wouldn't lower gasoline prices by any noticeable amount." Keystone XL, he said, would "bring additional oil to the world market, starting around 2020. The effect on oil prices then will be miniscule, the effect in the next couple years NONEXISTANT."

There is currently surplus pipeline capacity for moving Canadian oil into the U.S. A report prepared by oil consulting firm EnSys for the Department of Energy found that "in every scenario studied, with or without KXL, the excess cross-border pipeline capacity persists until after 2020."

Michael Levi, an energy expert at the Council of Foreign Relations said the impact of Keystone XL on gasoline prices "probably depends on the part of the country" but "would be very small either way." Levi wrote in a Washington Post commentary that the pipeline has a likely impact of "less than a dollar a barrel to the long-term price of oil, hardly a decisive factor when prices are already around $100 per barrel."

Canadian economist Andrew Leach said "I can't see any significant reason for KXL to lower gas prices,"

So at most, the pipeline would lower gasoline prices by a few cents in eight years or so.

The issue of Keystone XL is not the first time public discourse over gasoline prices is riddled with misconceptions. Last spring when prices eventually rose to near-record levels, Republicans and conservative media blamed the Obama administration's temporary deep water drilling moratorium enacted after the devastating BP oil spill in the Gulf.

Meanwhile, energy experts were saying that "it's not credible to blame the Obama Administration's drilling policies for today's high prices because of the relative scales involved." That quote came from Michael Canes, former chief economist of the American Petroleum Institute.

As it turned out, any decline in offshore production caused by the deep water drilling moratorium was more than overcome by a boost in onshore output. Increasing each year since 2008, U.S. oil production is higher than it's been in eight years and the number of oil rigs in operation is soaring, which complicates Republicans' messaging on gas prices.

"As far as drilling and production, it's going to be really good and robust," energy economist Michelle Michot Foss recently told the Houston Chronicle. "But consumers will be upset because gasoline prices will continue to be high."

The truth of the matter: Ramping up drilling and oil infrastructure can provide some economic benefits, but holding down gasoline prices is not one of them. If we want to be less vulnerable to price spikes, we have to use less oil. Period.

Economists and energy analysts have repeatedly made this point.

16
4

Oil production has risen each year since Obama took office

and is at its highest in eight years. President Obama’s administration has opened millions of new acres for oil and gas exploration. The number of rigs in operation has quadrupled during his tenure.

The only way to be less vulnerable to price spikes is to use less oil, Period.

Gas prices will be a big part of the political discussion: In a closed-door meeting last week, Speaker John A. Boehner instructed fellow Republicans to embrace the 'gas-pump anger' they find among their constituents when they return to their districts for the Presidents’ Day recess.

“This debate is a debate we want to have,” Mr. Boehner told his conference.

15
3

May drives a gas guzzling Mercedes

and my gasoline usage avg is 3.5 gal/mo. $10? Pshaw. Bring it on.

16
4

When the President talked

When the President talked during the campaign about how much energy we could save if people simply inflated their tires the correct amount the Republicans mocked him, and fact checkers discovered the President was correct. It's almost as if they're proud of being ignorant.

The party of dumb is at it again. This time they're criticizing the President for, correctly, talking about the energy implications for algae.

President Obama stated, “we’re making new investments in the development of gasoline and diesel and jet fuel that’s actually made from a plant-like substance If we can figure out how to make energy out of that, we’ll be doing all right. “

Republicans immediately mocked the algae line--without fact checking it, of course. Some Republicans, including Sen.Johanns, Cong. Darrell Issa, and Cong. Mike Pencehave have been supporting the algae research,. So if this is 'weird,' as Newt Gingrich, the candidate who wants the moon to become a state, stated, then Johanns, Issa and Pence are weird too.

When the Republicans have a chance to knock science, knock knowledge, they take it (eg. Rick Santorum’s idiotic statement concerning the importance of a college education) Facts and education are hardly the way to appeal to a crowd that respects neither.

17
3

I'll be extremely careful what I ask for. I want Rick Santorum

to be the Republican nominee for president. In fact, if I lived in Michigan I would raid the Republican Primary and vote for him. Raiding primaries is legal in Michigan, just as it is in Texas.

Following is just one more reason I would love for tricky Ricky to be the nominee.

At an event in Lansing, Michigan yesterday, Rick Santorum put forward an alternate theory for the cause of the financial crisis in 2008: that rising gas prices caused Americans to default on their mortgages, leading to the wave of foreclosures that sparked Wall Street’s near collapse.

“We went into a recession in 2008 because of gasoline prices,” Santorum said. “The bubble burst in housing because people couldn’t pay their mortgages because of $4 a gallon gasoline.”

This isn’t the first time Rick Santorum has offered up his gas price theory. Earlier he made the same claim in Colorado. “We went into a recession in 2008. People forget why. They thought it was a housing bubble. The housing bubble was caused because of a dramatic spike in energy prices that caused the housing bubble to burst,” Santorum told the audience. “People had to pay so much money to air condition and heat their homes or pay for gasoline that they couldn’t pay their mortgage.”

Rather than blame subprime loans or the derivatives market, Republican candidates have named other causes for the financial crisis. Santorum appears to be the first to promote the gas price theory, and he does so at a time when Republicans are looking at rising gas prices as a new opportunity to attack President Obama.

However, as BuzzFeed’s Zeke Miller points out, the extensive report on the causes of the crisis by the Financial Crisis Inquiry Commission made no mention of gas, gasoline, or energy as triggering the crisis.

18
4

Half Truths

Dr. May, tis funny how you refer to"half truths" in your initial post. The fact that you admit there is any truth brings little merit to your daily rhetoric.

Here's how most come to feel about you and your daily writings and the truth, it's not a lie if "you" believe it's the truth. Only a select few believe what "you" say is the truth.

17
4

Be careful what you ask for

This line comes from someone who more than likely voted for George W. Bush, not once, but twice? I guess May is one to know.

4 more years of Christian bliss with Obama

4
21

Good article Dr. May, right

Good article Dr. May, right on the money.

I've noticed that some poeple say that we should accept the high oil prices, because there is nothing we can do about except "lean forward" and take it from OPEC and the speculators. This "do nothing about it" approach (which Obama is supporting) is why we are suffering at the pump.

As much as they say they care about the poor, how much do you think these prices are affecting them now? Bringing down the price of gas we pay at the pump gives everyone a raise (even more so than Obama's payroll tax cut, which is going straight into the gas tank) and they will have that extra money to spend or save as they wish.

Obama knows what he can do about the prices on his end, and he refuses to do them and instead wants to blame Republicans for wanting to increase drilling. Pathetic, pathetic, pathetic.

13
1

political hay

Obama can turn the gas price rise to his advantage and also get points from Michelle. He should offer to the 100,000,000 americans who are overweight a $200 tax credit to buy a bicycle and also he could have a milage deduction to get folks to ride. That would lower demand for gas and drive down oil prices. The drop in federal revenue would be offset by the health benifits and a drop in medicaid and medicare expenditures.

15
2

The public is almost

The public is almost completely ignorant of the dynamics of world oil markets. It is widely believed that prices are determined domestically and that if upscale environmentalists did not get in the way, we could drill out enough oil so that gas prices would be cheap again.

President Obama has opened up large portions of previously protected coastal areas to drilling. Oil production has risen substantially in his three years in office and is now back near the peaks of 2002. The other problem with the Republican complaints is that production in the United States really does not matter much for the price of gas. Oil prices in the United States depend on the world market, not just supply and demand in the United States.

US production is roughly eight million barrels a day, it accounts for less than 9 percent of a worldwide market that is close to 90 million barrels a day. Even if US production could be increased by a third it would only increase world supply by 3 percent. This would lower the price of oil by 7-8 percent. This is not trivial, but it is not the difference between $2-a-gallon gas and $4-a-gallon gas. In other words, there is nothing that the United States can do in terms of its domestic production that would bring gas prices down to the levels that would make many American car owners happy.

Since the media consider it to be their job to report what candidates say and not access its accuracy, it is likely that the public will go the polls believing that we can again get cheap gas if we just 'drill baby drill'.

The only way to lower the price of oil is to use less of it--PERIOD!!

17
4

The Lubbock paper

Again, Mr. May, you are part of the reason why many people in Lubbock do NOT subscribe to the AJ.

3
17

Rettch

I don't know what science fiction article you are getting your ideas from, but you need to put it down and get with the times.

The world is dependent on oil, and will be for many years to come. In fact, even developing countries understand it's importance and necessity and want to do everything they can to get their industrial and energy policies up to speed. They want to be like the United States and know that we got where we are because of our oil use.

Simply demanding that we use less of it immediately and forever is irrational and ignorant. The truth is that we will have to increase our supply, not only to meet our needs, but to help these other countries grow and catch up to the rest of the industrialized nations.

20
3

I agree pattia2u

When is the AJ gonna wake up and see this nut for what he is and give him the boot?

2
18

Wretch you said

"and is at its highest in eight years. President Obama’s administration has opened millions of new acres for oil and gas exploration. The number of rigs in operation has quadrupled during his tenure."

facts and documentation would be nice.

5
18

Obviousman,

Logic and consistency of thought are not characteristics of the Progressive Left mind.

Barack Obama and the Left claim petroleum prices are up because of speculators and promise to regulate the speculators. Government control is the threat of the Left and uniformly causes shortages and higher prices when the Leftists implement the heavy hand of a Socialist government. One only needs to consider the controls of Jimmy Carter and the resulting gas rationing and long lines at the gasoline stations.

Speculators include countries such as China, Japan, and the European Union. Private speculators buy petroleum on the London and other markets. Obama cannot control China or most of the other speculators. Obama is again blowing smoke.

Producing all the petroleum we need and exporting the rest is the best means of security. Trillions of dollars can be made by US companies and the US government. We would not have to worry about OPEC, Iran, or China pushing up the cost of foreign oil or cutting off our supply.

The United States is a net exporter of corn, soybeans, beef, pork, rice, and other commodities. These commodities are sold on the world market and are purchased by Russia, China, Japan, and dozens of other countries. Our domestic food prices are far lower than other countries, and even the poorest people in the United States can afford enough food to become obese if they so desire. We do not fear for anyone cutting off our food supply.

The United States needs to produce oil, coal, natural gas, wood, iron, copper, rare earth elements, and other materials in amounts that exceed our own needs. The rest can be exported, creating profits for our government and for private investors.

Allowing the Environmentalists and other Left Wing Nuts to decrease our energy production has greatly harmed our nation. Climate Change has been the refuge of the Progressive Left since their beloved Soviet Union collapsed. Climate Change continues to be about taking power from the people and giving it to governments. It is also about taking power from the United States of America and giving it to the United Nations, which is a very frightening reality that has been pursued by the Progressive Left for some time.

Millions of otherwise bright people fell for the silliness of Global Warming without realizing that Earth is still in a global ice age. Both poles freeze and the average surface temperature of Earth is only 45 degrees Fahrenheit, which does not allow for the growing of many crops. A little extra warmth would have done all of us some good.

15
5

@May

Logic and consistency of thought are two elements that the Liberal Progressive Left live for.

For you to even mention these two elements is way out of your league.

4 more years of Christian bliss with Obama

1
0

Hello...

Duplicate post

4
4

Dr. May Hello

Dr. May, I have been away for a while, how are you doing?

11
4

May: One only needs to

May: One only needs to consider the controls of Jimmy Carter and the resulting gas rationing and long lines at the gasoline stations.

The Truth: Meanwhile, the shock produced chaos in the West. In the United States, the retail price of a gallon of gasoline (petrol) rose from a national average of 38.5 cents in May 1973 to 55.1 cents in June 1974. State governments requested citizens not put up Christmas lights, with Oregon banning Christmas as well as commercial lighting altogether.[24] Politicians called for a national gas rationing program.[25] Nixon requested gasoline stations to voluntarily not sell gasoline on Saturday nights or Sundays; 90% of owners complied, which resulted in lines on weekdays. Wikipedia.

Question: Dr. May, care to respond, or will you chicken out as usual???

13
3

Richard Nixon had imposed

Richard Nixon had imposed price controls on domestic oil, which had helped cause shortages that led to gasoline lines during the 1973 Oil Crisis.

4
11

Dorotik,

Your comments on Richard Nixon are well taken. Thank you

The policies of the Nixon, Ford, and Carter Administrations on oil production, price controls, and dealing with the Soviet Union and our other enemies (notably Iran during the Carter Administration) created many problems. Even Ronald Reagan was unable to solve all of the problems that had been created.

“How gas price controls sparked ‘70s shortages” http://www.washingtontimes.com/news/2006/may/15/20060515-122820-6110r/?page=2

“Historical Perspective: The Windfall Profit Tax -- Career of a Concept” “Ronald Reagan had attacked the WPT while campaigning for the presidency in 1980. Once in the White House, he consistently supported repeal. But in the face of a series of repeal attempts, the WPT stayed on the books. Even the Tax Reform Act of 1986 left the levy intact, despite Treasury support for repeal (and the bill's rollback of the industry's other tax preferences).” http://www.taxhistory.org/thp/readings.nsf/cf7c9c870b600b9585256df80075b9dd/edf8de04e58e4b14852570ba0048848b

“By 1980, the prestige of American power had declined to its lowest point since the 1930s. The Carter Administration’s botched Iran rescue mission of April 24, 1980—too small to succeed, large enough to fail conspicuously—distilled that decline to its essence. Worse, Carter himself shared Nixon and Kissinger’s pessimism about America’s prospects. Following his Camp David retreat in the summer of 1979, the President admonished the American people to overcome their malaise and learn to accept the diminishing capacity of the United States to influence events abroad.” http://www.heritage.org/research/reports/2011/11/the-first-principles-of-ronald-reagans-foreign-policy

9
1

CLOSE!!!

Dow Jones Industrial Average (^DJI) -DJI 13,005.50 23.99(0.18%) 4:00PM EST

Back to Top