By The Raleigh Telegram
WASHINGTON DC – After gasoline prices passed $4 per gallon in some parts of the country, many Americans are wondering if rising fuel costs may cause another dip in the economy. Since many items are shipped by truck in the United States, a higher prices at the pump may later translate into higher prices for everything from milk to mattresses. Whether or not it causes further inflation, gas prices are hitting many Americans in the pocketbook during these tough economic times.
The rising cost of fuel is on the minds of Americans to the point that President Barack Obama’s approval rating has slipped in the polls to an all time low near only 40%, largely due to the rising price of oil and gasoline.
In recent weeks, perhaps because of Americans’ discontent with the current energy prices, President Obama has made confusing, if not entirely contradictory statements on energy policy and his own support of North American oil production efforts.
During a visit to Cushing, Oklahoma this week, President Obama touted his energy policy as being friendly to oil production. He said that his administration was fast-tracking the southern portion of the Keystone pipeline that will run from Cushing to the Gulf of Mexico.
“Today, I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done,” said the President in his speech.
However, critics say that the southern portion of the pipeline did not need governmental approval and that it is only 60 days away from breaking ground, meaning that there is little red tape to cut through in the first place.
In contrast to the southern portion of the pipeline, the President has previously stated that he is opposed to the northern portion that would allow Canadian oil to enter the US market.
Earlier this year, President Obama said that he strongly opposed the northern leg of the section of the proposed Keystone oil pipeline that would connect oil fields in Alberta, Canada with Oklahoma. The pipeline needs Presidential approval because it crosses an international border into Canada.
Late last year, Congress passed a bill requiring the President to approve or disapprove the application for the pipeline to cross the border. Subsequently, on January 18, 2012, President Obama rejected the pipeline, saying that the Congressional deadline “prevented a full assessment of the pipeline’s impact.”
According to reports in Politico.com and USAToday, in March, the President personally called members of Congress to lobby against another bill that would remove the President’s authority to approve the northern portion of the pipeline.
“President Barack Obama is intervening in a Senate fight over the Keystone XL oil pipeline and personally lobbying Democrats to reject an amendment calling for its construction, according to several sources familiar with the talks,” said an article in Politico.com on March 8th.
And as President Obama has both opposed and “fast-tracked” portions of the pipeline, his other statements have also seemed contradictory and confusing as well.
During his speech in Cushing, Obama said that he was for oil drilling and has been pushing to open oil fields in America, saying that it would help meet America’s requirements for energy.
“Over the last three years, I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states,” said the President. “We’re opening up more than 75 percent of our potential oil resources offshore. Now, you wouldn’t know all this from listening to the television set.”
In contrast, according to an article in Voice of America, a federal government news service, not long ago, President Obama said that domestic drilling and an increase in supply from North American sources would not help bring down the price of gasoline.
“It cannot just be drilling for more oil,” said President Obama during a speech on March 15th. At that time, his administration blamed the rising cost of gas on problems in Iran, Chinese demands for fuel, and speculators playing the commodities market.
Reports at the time said that the president was consulting with Great Britain on potentially releasing reserve supplies of oil held by each nation to help lower the price on the market. Administration officials later said that report was false.
Depending on who you ask and when you ask, the Obama administration has a mixed record on drilling for oil. For example, the Obama administration imposed a complete moratorium on new drilling for oil in the Gulf of Mexico for almost two years. The moratorium was put into effect in 2010 in the wake of the BP oil crisis, which created an ecological disaster in the Gulf after an explosion on a deepwater drilling platform spilled millions of gallons of oil into the sea.
The moratorium was finally lifted in December of last year, when the administration allowed the selling oil leases to take place.
According to the New York Times, the new oil leases for 20 million acres in December brought in $330 million for the federal government and have the potential to produce 400 million barrels of oil. However, according to reports in the Times-Picayune newspaper in New Orleans, many people in Louisiana who depend on energy production for their jobs are complaining that the Obama administration is dragging its feet in finally allowing drilling to resume off the coast.
Despite his pledge of pushing to help support American energy, President Obama has also publicly stated that he is encouraging Congress to end all federal tax breaks for American oil companies, which represent around $4 billion per year. Some Republicans say that the tax breaks encourage American energy exploration and the reduction in tax breaks may be passed along to the consumer in the form of higher energy prices. However, some Democrats say that “big oil” companies like Exxon need to pay their fair share of taxes after posting record profits for years and that the subsidies should end.
The President’s Secretary of Energy, Steven Chu, has received some criticism from both sides of the political fence and has also given inconsistent signals to the American public. The Nobel Prize winning scientist has been praised for his efforts to help spur development of alternative energy. However, the Department of Energy has made loans to solar firms that eventually went bankrupt, including over $500 million to failed solar company Solyndra. As a result, the loan programs were seen as a failure and waste of taxpayer dollars.
Further, in the wake of the nuclear disaster after a tsunami hit Japan, many are questioning why Secretary Chu is supporting the expansion of nuclear power plants in the United States. With a large area of Japan made uninhabitable by nuclear radiation, an expansion of nuclear power in the United States is meeting with resistance, as some countries such as Germany are making plans to end nuclear power production altogether.
Secretary Chu has encouraged people to buy electric cars like the Chevrolet Volt. However, during a hearing with Congress, he admitted he doesn’t own a car and hasn’t had to deal with high gas prices like most Americans since he is driven to work by a chauffeur in his security detail. According to the Daily Caller website, his wife does not drive an electric car either, but in fact owns a BMW that gets 18 miles per gallon in the city.
Despite the high gas prices in the United States, Secretary Chu recently gave himself an A- for his performance in helping to manage energy policy in the United States.
“The tools we have at our disposal are limited, but I would I say I would give myself a little higher in that since I became Secretary of Energy, I’ve been doing everything I can to get long-term solutions,” Chu said.
Whatever the cause of high gasoline prices, one thing is clear: Americans are paying more for gas now than ever before and the summertime peak of demand has not even hit yet.
According to GasBuddy.com, the cost of gasoline has doubled in price since President Obama took office, from an average of $1.90 per gallon in March of 2009 to over $3.80 per gallon this year. ::
Article Posted: Saturday, March 24th, 2012