It is a quadrennial ritual for the opposition to attack the incumbent president for failing to keep fuel prices under control. In the current campaign, Republicans routinely accuse President Obama of not doing enough, and specifically for failing to approve enough new drilling for oil and for temporarily blocking construction of a new pipeline to carry Alberta oil-sand slurry to Houston for refining. Many actually seem to blame the president for not exerting more control over prices.
This is quite a strange line of attack from people who are incessantly demanding a return to untrammeled free markets. Do they really want Obama to impose price controls?
Presidents, of course, actually have very limited leverage over the short-term fluctuations of fuel prices: they are primarily a result of global market forces. Changes in fuel prices in the US run directly parallel to those in Europe and elsewhere. The Europeans pay a lot more because they have higher taxes than we do (which they use to maintain their infrastructure better than we do).
A big part of the current spike in oil prices has to do with nervousness about the prospects of war with Iran, which would certainly disrupt supplies and thus send prices up. So buyers are bidding up the price now in anticipation of such a crisis in the Persian Gulf.
Another factor is the tentative recovery that is occurring in the US economy, along with continuing strong demand from emerging markets such as China, India and Brazil. When more people in the United States have jobs, as they now do, more people will buy gasoline. Rising price at the pump is a downside of economic recovery.
The President and Congress do have the capacity to affect our long-term energy posture. How have we been doing on this level? In short, Obama’s not doing too badly. He has adopted an “all of the above” energy policy that promotes everything from drilling for oil and gas to all sorts of alternative and renewable energy. Specifically on petroleum, US production is up substantially on Obama’s watch, while, for the first time in years, less than fifty percent of the oil we use now comes from foreign sources. We are doing better than we were under Bush.
In the short run, because we continue to suck up as much oil as we can get, we have no choice but to “suck it up” and deal with the higher prices. Oh, it would help if the hawks stopped talking up an attack on Iran.
In the long run, Obama’s “all of the above” policy promises to reduce our dependence on petroleum and enhance the role of renewable energy.
In the even longer run, all of this may be too late to stop the catastrophic impact of global warming. But the upside of that is that the worldwide economic disruption that would result will certainly reduce demand for fuel.
So it might all work out. Are you relieved?