Today I had a fun* conversation on Facebook in response to someone asking why the President didn’t do something about gas prices. Some facts I brought to start the conversation:
- Domestic drilling is at an all time high, even higher than it was under President Bush
- The US at present is a net exporter of refined petroleum products.
- It was remarked that gas was $1.83 when Bush left office in January of 2009. I kindly directed them to this chart:
The conversation picked up as I was then linked to this asinine blog post named 10 Things Obama Could Do to Fix Gas Prices, which kindly outlines some terrible ideas and claims. It purports that the oil industry has been subject to punitive tax treatment, that we just need to unshackle the oil companies and let them be free, stop worrying they’ll be the next BP, restore offshore permitting to pre-BP disaster levels, ignore the dangers of fracking, and encourage the development of a nationwide natural gas infrastructure.
- How the hell is an industry that receives billions of dollars in tax payer subsidies “targeted for punitive tax treatment”? Last I checked that was the opposite of punitive.
- And we’re just supposed to open the entire US carte blanche to an industry that has shown time and time again they don’t care if they poison the water and the earth so long as they get to move their crude along the way? That list includes the item to “trust they won’t be the next BP”. Because that worked so very, very well the last time we did it.
- The other list points (keystone, pre-BP disaster permitting, natural gas infrastructure) won’t touch oil prices for years, probably closer to a decade, ignoring any other issues that they cause
- There is seriously very very little that one person can do to change the price of a commodity market overnight aside from seriously shocking either the supply or demand of that commodity. The demand side got destroyed when the world economy ground to a stand still. That’s how you got 1.83 gas prices in January of 2009. Aside from Obama unleashing the Strategic Oil Reserves (called Strategic for a reason, meaning you don’t just use them whenever prices get uncomfortable) there’s not a whole lot to attack the price with.
I was then given a list of options to alleviate gas prices, aka more tea party talking points. The other side of this discussion suggested that we “fast track” the Keystone pipeline, that we take a tough stance on Iran, that we work to eliminate speculators from the market, that we “get the government the hell out of free enterprise (?), and that we eliminate the EPA.
- Keystone wouldn’t impact gas prices for many, many years. It’s not like signing it to go will just start the delicious tar sands flowing over the border and into your tanks. It will take a long, long time for that to come online and poison the Midwest Aquifer.
- Taking a stronger (hawkish) stance on Iran would drive prices of oil up, not down. Instability in the Middle East and threats of closing the straights of Hormuz are what rattle world oil markets and shock prices in the wrong direction.
- Even unlimited permits for drilling wouldn’t take effect for many, many years.
- As for “getting the government out of free enterprise” I’m not sure what the hell that even means for gas prices. Even if there was a new stimulus that fired up the engines of the private economy (cough*infrastructure spending*cough) that would only serve to raise gas prices.
- Eliminating the EPA might lower gas prices a bit when there are no pollution controls (sure go ahead and burn that kerosene in your car!), but I’m not sure that saving 20¢ a gallon is worth lung cancer and Beijing style smog.
- As for speculation, isn’t that just a sign that the beloved free market is acting in the way it should? Does that mean you want the government to regulate speculators? But then that’s not a free market where we can all suckle at the glorious teat of capitalism!
Devoid of an answer I was directed to yet another blog post titled Can Obama and the Government Stop Rising Gas Prices.** That article suggests that gas prices could be reduced by dissolving Obama’s support for renewables, suspending road taxes, and opening for more domestic drilling.
- Again with the domestic drilling. It’s already at a peak, and even if we opened the entire nation to drilling today it wouldn’t touch oil prices until far down the line.
- Without road taxes you’ll see things like the I35 bridge collapse happening a lot more. Those roads you drive on (that the government built for you) need money to stay structurally sound. No road taxes means we fire a bunch of construction workers AND you get to hit more potholes on your drive in. That’s a fine solution for the immediate price of gas, but what happens when the bill for all those rusted out bridges comes due? The states and the feds will have to pay more to repair or replace them then the maintenance cost would have been. Sort of like not going to get your teeth cleaned means you get a more expensive emergency root canal later.
- I have no idea why someone like Obama stating that they like renewable energy would impact gas prices EXCEPT that it would cause speculators to not buy oil and to buy up stocks in renewable companies, something that would have the added benefit of lowering oil prices (putting pressure on OPEC as stated in that blog post), creating high tech jobs in the renewable industry, AND letting the beloved free market work its magic. I’m not seeing a downside to that.
After this point with no actual answer the discussion turned to personal attacks of my character and the manner in which I responded (nearly copy/pasted as above). So I was left without an answer. What exactly could the President do to change the price of gas today? The answer short of unleashing the Strategic Oil Reserve or discovering a billion barrel reserve under the White House is nothing. I’m genuinely curious and would love to hear any ideas in the comments.
*Fun is a relative term. It was “fun” compared to a root canal.
**I always love how a sentence like that asking for socialist price controls doesn’t cause anyone who decries “left wing socialism” pause.