President Obama on High Gas Prices: Blame Anyone But Me

by Myron Ebell on April 30, 2011

in Blog, Features

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The White House has finally realized that there is a close correlation between rising gas prices and dropping presidential popularity ratings, and so President Barack Obama has begun flailing around to try to deflect the blame.  Normally, I would sympathize with the President’s predicament.  Oil prices go up and down as a result of global supply and demand.  But in this case, I think the President deserves all the blame he’s going to get from the American people.

President Obama and his Administration have done everything they can to reduce domestic oil and natural gas production.  The Department of the Interior has cancelled leases on federal land in the West, delayed and denied permits necessary to start drilling on leases (which, remember, are awarded by competitive bid and have already been paid for), restored an executive moratorium on leasing most federal offshore areas, denied a permit to a lease off the Alaska coast for which Shell paid $2.2 billion and has already invested $4 billion, and placed a moratorium on new drilling in deep and shallow waters in the western Gulf of Mexico (the only major offshore oil field in the U. S.).  Since lifting the western Gulf moratorium earlier this year, Interior has been slow-walking the approval of drilling permits.  The President also steadfastly opposes opening the coastal plain of the Arctic National Wildlife Refuge to oil and gas exploration.

Although President Obama said in a recent speech that the U. S. was going to have to produce more oil, the Department of Energy’s Energy Information Administration has projected that domestic oil production is going to decline significantly in the next few years as a result of Administration policies.  The dropoff would be much steeper were it not for the rapid expansion of production in the Bakken field in North Dakota and Montana.  The Obama Administration has not been able to slow production there because all the land is privately owned.

The fact is that if the Obama Administration reversed course and said from now on it’s going to be, “Drill, baby, drill,” the price of oil would drop immediately on world markets.  That’s because a great deal of the risk premium in current prices would be dissipated by the knowledge that major new production was going to be coming online in the next few years.

As Thompson Ayodele of the Initiative for Public Policy Analysis, a free market think tank in Nigeria, recently wrote in an op-ed, the United States is simply not doing its share to keep oil prices affordable for people around the world.  Instead of doing our share, President Obama this week asked Saudi Arabia to increase its oil production.  Last month while visiting Brazil, he said that he was glad Brazil was going to be able to supply more oil for America.  His conduct is simply shameful.

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