CQ TODAY ONLINE NEWS
Feb. 24, 2012 – 10:25 p.m.
Gas Prices Give Rise to Partisan Rhetoric
By Geof Koss, CQ Staff
The recent steady rise in gasoline prices has all sides mobilizing for what is likely to be a lengthy election year fight over Obama administration energy policies.
Sniping over gasoline prices has become a perennial Washington event in recent years, but one that usually does not take off until the approach of the summer driving season. But already the Obama administration is saying it may consider a sale of oil from the Strategic Petroleum Reserve (SPR) in an attempt to reduce prices.
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With the average price of gasoline nationwide climbing by almost 30 cents a gallon over the past month — to $3.64 for a gallon of regular on Feb. 24, according to the American Automobile Association — the White House and its critics are scrambling to define the debate over what could be a major issue in the fall campaign.
The issue has risen quickly this month. AAA said the average price of a gallon of gasoline was $3.22 a year ago. And in an appearance before the Senate Energy and Natural Resources Committee last month, the head of the Energy Information Administration projected the average price this year would be $3.48, a slight reduction from last year.
Democrats have resurrected longstanding concerns over the role of financial speculators in the quick increase, which President Obama also noted is largely driven by tensions over Iran’s nuclear ambitions.
Obama sought to emphasize recent steps his administration has taken to increase domestic production as well as a long-term energy strategy focused on developing alternative sources. “You know there are no quick fixes to this problem, and you know we can’t just drill our way to lower gas prices,” the president said during a speech at the University of Miami, where he called for a “sustained, all-of-the-above strategy that develops every available source of American energy.”
‘Obama Premium’
Republicans and the oil and gas industry denounced Obama’s remarks, ticking off a list of administration actions that they blame for rising prices.
“As the American people pay for the Obama Premium at the pump, President Obama’s answer is to cancel onshore oil and natural gas leases, close off the vast majority of our offshore areas to new drilling, block the Keystone XL pipeline, delay and block the development of oil shale and impose ocean zoning regulations that could limit all types of energy production — including renewable,” said House Natural Resources Chairman
In an effort to revive his flagging presidential bid, former House Speaker Newt Gingrich went so far as to promise lower gas prices if elected.
“I’ve developed a program for American energy so no future president will ever bow to a Saudi king again and so every American can look forward to $2.50 a gallon gasoline,” he said during a debate last week.
Underlying such rhetoric is general acknowledgment by economists and energy experts that there is little that any government can do to control the price of a globalized commodity such as oil.
Gas Prices Give Rise to Partisan Rhetoric
While Republicans touted legislation (
And even if it did, it would be years before production from those areas comes on line.
Sen.
She added that Senate Majority Leader
Opening the refuge will require “a firm majority and a friendlier administration — or until a major international calamity shows why we should have opened it long ago,” Murkowski said.
Tapping the SPR
However, one tool for addressing oil prices that is controlled by the president and can have a short-term effect is the federal SPR. Obama did just that last year when he ordered the release of 30 million barrels of oil to calm oil markets spooked by Libya’s unrest.
Three House Democrats and Sen.
Instead of releasing emergency supplies, American Petroleum Institute President and Chief Executive Jack Gerard said last week that the administration should focus on increasing domestic production, which would “contribute to the global supply, and thus bring it down.”
“To talk about a SPR release is an acknowledgement it’s really a supply question and we need to get back to a comprehensive policy to bring more supply to the market,” he told reporters on a conference call.
Domestic oil production increased almost 11 percent between 2008 and 2010, and was at its highest level since 2003, according to the EIA.
Echoing GOP critics, Gerard called it disingenuous for the Obama administration to try to take credit for the increase in output.
“While oil production is up, the increase relates almost entirely to investment and leasing decisions made before, sometimes long before the administration came into office, and the increase is due to oil and gas development on private and state lands over which the government has little or no control at all,” he said.