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  • Gas Prices Going Up, But President Obama Is Standing Still

    The gas price headlines aren’t looking so good for Americans. Honolulu is a penny away from record gas prices. Chicago gas nears $5 a gallon. Nationally, $4 a gallon average gas may be only be a month away. There’s something that President Obama could do to help solve the problem but, instead, he’s spending his time laying blame.

    In a speech today in suburban Virginia, he said there’s plenty of supply to meet the world’s demand for oil, placing the blame for the high prices on speculators:

    The problem is … speculators and people make various bets, and they say, you know what, we think that maybe there’s a 20 percent chance that something might happen in the Middle East that might disrupt oil supply, so we’re going to bet that oil is going to go up real high. And that spikes up prices significantly.

    Blaming speculators, though, is a costly diversion to real solutions. Speculators, at best, marginally increase the price of gasoline if it leads to oil inventories increasing—but only in the short run, because businesses have to unload these inventories.  Allowing access to onshore and offshore drilling production can help lower prices because futures markets and speculators will lower the future cost of oil, which will translate into lower fuel prices at the pump.

    And what the president didn’t say is that he’s deliberately choosing not to allow access to that domestic oil supply by continuing his moratorium on drilling in the Gulf of Mexico, following the oil spill disaster that occurred one year ago today. The Wall Street Journal reports:

    One year after the BP PLC oil spill, Gulf of Mexico energy output is beginning to show the impact of the Obama administration’s 10-month freeze on deep-water drilling.

    Offshore oil production, most of which comes from the Gulf, is expected to average 1.55 million barrels a day this year, down 13% from 2010, according to the U.S. Energy Information Administration . . .

    The drilling suspension, along with a new, slower permitting process, will result in the loss this year of about 375,000 barrels of oil a day, according to energy consultancy Wood Mackenzie. That is roughly equivalent to one-third of the production in Libya that remains shut down because of political turmoil there.

    So what’s the solution? The president needs to change course, lift the moratorium on drilling in the Gulf, and open up our domestic resources for exploration. Heritage’s John Ligon and Nicolos Loris write:

    Increasing access to oil reserves in the U.S., both onshore and offshore, would help offset rising demand, increase jobs, and stimulate the economy. Moreover, this will help improve our strategic position, as much of the world’s supply of oil is delivered in a restrictive market dominated by unstable or hostile nations.

    Loris and Ligon also note that there are oil sources onshore, too, that are currently off-limits, as well as the potential for 800 billion barrels of recoverable oil from shale throughout Colorado, Utah and Wyoming. It’s time for Congress and the Obama Administration to open the door to increasing the domestic energy supply, not leaving us dependent on foreign sources of oil.

    Posted in Energy [slideshow_deploy]

    23 Responses to Gas Prices Going Up, But President Obama Is Standing Still

    1. Patricia says:

      Why would President Obama act concerned during the 2008 campaign he stated that the American People would have to hurt for them to convert to alternate fule. This is exactly what he wants to happen.

      • shaunte says:

        If you must know, Obama had control over the prices but unfortunately no one went out to vote for the democrates so the control of the money was taken over by the republicans.

    2. Bobbie says:

      To base price on speculation regarding a resource we have plenty of in America, seems deranged? Who's faces are actually in control of the price change? Had we proper governing, this wouldn't have come to be. Obama continues to deliberately hold America back! He'll have to do something to look good, hopefully people won't be fooled.

    3. Les Smith, Lake Wyli says:

      Don't blame the "speculators" for rising fuel prices… Oil distributors for instance need to hedge against future price fluctuations somewhat like an insurance policy by purchasing option contracts on the commodities exchange. The average Federal and state excise tax on gasoline in the USA is over 47%. No big surprise that the government is silent on rising fuel prices… They get an extra 47 cents on every dollar increase in the cost per gallon of gas paid by the consumer (not to mention the extra campaign contributions for protecting the profits of big oil producers).

      • Ann says:

        FINNALLY SOMEONE POINTING THIS OUT……………RICH ND IS RAKING 23 CENTS GAS TAX ON EVERY GALLON + THE 18 FEDERAL TAX. SO WHERE ARE THE TAX CUTTERS ON THIS ONE.?? Poor ND special interests
        spent nearly a million dollars to defeat the regressive property tax proposal by scaring the people into thinking they would lose essential services a have to raise taxes to replace revenue. A dispicable hoax on the states citizens. But you know if you have money to run 1000's of main street media tv, paper ads…..& you only have time to read the paper or watch the 5 o'clock news…………….it makes the point if you say it often enough ..it must be true. Federal & gas tax could be dropped at least until unemployment is back to 5% or lower.

    4. cathy, maine says:

      let the free markets determine gas prices….and interest rates….please. we can handle free market ups and downs, we cannot handle government manipulated market ups and downs.

    5. Lloyd Scallan (New O says:

      Les Smith – Thank you for understanding the role of speculators in the overall structure of gas prices and the effect of government taxes. When speculators recognize a possible drop in world wide crude supply, prices increased based on future supply, or lack thereof. When a MIddle East conflict, or more to the point, a U.S. President stands in the way of oil production from U.S. deposits, supply drops thus prices go up. Since the Middle East is always at war, and the fact that only about 3% of Libyan crude comes to the U.S., the major factor driving up gas prices is Obama's ideological hatred of oil.

    6. Leon Lundquist, Dura says:

      Look here guys! Quantitative Easing is part of it! Over Regulation is part of it! Government gets a lion's share percentage of Big Oil, so High Oil Prices are in the Government's interest because they get more Revenue if the Price of Oil is High! Thirteen Percent is a gigantic blow to the Oil Markets! While Obama is Deflecting Blame on the Speculators it is important to realize it is Deflection! The Government is the culpret, the Government is guilty! Otherwise, why Deflect?

      We have heard this "hate the rich" rhetoric for a Century now! Are you as sick of it as I am? It has led to Mass Murder in the past, so if anybody should be prosecuted for "Hate Speech" it should be the Progressives! Nobody hates Capitalism like Obama does unless they are fully Indoctrinated Communists! I know it is hateful to call evil "Evil," and I am terribly sorry to offend, but Jeeeze! "Tax the Rich" is an evil call when you consider the whole reason America is a Super Power is our Capitalist past! (We are a Socialist Nation now, and they just haven't figured out how to steal Everything! Yet!)

      Defund and abolish the Department of Energy, they actually are trying to steal Trillions of Dollars from Americans! We should pay for that?

    7. Roger S., Mass. says:

      Thank you Leon! It's not the speculators. — They're traders like all of us. It's not the lack of supply. There's plenty of Oil –BO said so himself. It's not alone the threat of more trouble in the Middle East. It's not even just the QE which is beginning to fan inflation, which everybody who had any idea about how things really work in a real world has been predicting right along. It's all of these things together, plus one other:

      It's in no small part also the "dumb-down-the-rubes" talk by our Elitist Savior- -and-Organizer-in-Chief. Also, his propensity to say something today, and something else again tomorrow. His "blow-by" and whirlwind inaction together manage to fan the fires of market uncertainty as much as any of the other factors. Markets react to uncertainty with rising prices AND volatility. Which is worse than if it were merely one or the other. He should just shut up — and get the EPA and DOE and all the other alphabet noodles to issue drilling permits. That WOULD help! That is, if he really wants to help, which I doubt.

    8. RennyG Maryland says:

      It is so sad that someone voted this person into the presendency. BUT, there is nothing we can do!!! I say again, look into the "Alinsky Model" of taking over, "changing" a country!!! He is right on target!!! PRAYERS!!

    9. Daver (Ft Worth) says:

      It's a chicken and egg scenario regarding the price of gas. The beauty is that everyone of the declared Repub candidates have the mantra of, "Drill, Baby Drill!" available in the playbook as a sure fire winner! The only Americans who at $5 a gallon who wouldn't approve, are the leftists lefties who hate their own mothers for having used disposable diapers on them as their "original sin!"

    10. Jim, Washington, DC says:

      One problem with the headline – the President is not "Standing Still." His administration is actually considering rules to limit the use of oceans, which includes offshore drilling. That seems more like moving in the opposite direction!

    11. LMR, Kansas says:

      This article proves the point the president was trying to make.

      You make the comment that the deep water dives took over 10 months before we noticed the decline of oil production.

      But then you expect for an immediate lowering in gas prices if we start drilling domestically. BOTH TIME LINES CAN NOT EXIST!

    12. Rachel says:

      seriously am I the only person having a hard time believing that Obama is rubbing his hands together and laughing evilly while plotting how to screw people at the pump? I'm guessing he has better things to do. Oil always goes up and down- whether a republican or democrat is in Office. We need to stop whining and realize this is where the future is headed. And ask the gulf coast residents how they feel about off shore drilling. It may be a short term solution but we still need to move in another direction or we will be having this conversation over and over again.

    13. Lisa in Connecticut says:

      Americans have 4.5% of the world's population yet consume 25% of the global oil production. If we want prices to go down, all we need to do is reduce consumption and the industry will respond by lowering costs. It happened two years ago and it will happen again. American consumers actually can make a difference. We change our consumption habits and the world oil market will feel it. Yes, it's driven by supply and demand, but both play and intergral part in prices.

      I'm disappointed in the statement above that says we have 800 billion barrels of recoveralbe oil in what I believe they are referring to as the Bakkan formation, but that isn't close to accurate. Estimates are that our total US oil reserves are 50 billion barrels (including Alaska). The Bakkan is estimated at 3.6 billion barrels. As Americans we consume more than 20 million barrels a day… do the math, 50 billion barrels will last 2500 days or about 7 years without foreign supplies. America peaked in 1970 and has been in decline since.

      The big question is — what're we gonna do when China and India's demand catches up to the US? Something to think about.

    14. Pingback: ‘Confused’ Chuck Todd: Don’t Blame Obama for Rising Gas Prices | Matrix Blog

    15. Nick says:

      The issue, once again, is the same as it is always is. You can change the dates and the players, but it always comes out the same: an egregiously slanted double-standard by the media that always ends up blaming republicans and giving democrats a free pass. . Anyone who doesn't see it by now is guilty of willful blindness. Bush got hammered relentless in the press when gas prices went. For God's sake, he even got hammered when the went down! (Remember that: the libs and media–pardon the redundancy– claimed his "oil cronies" were manipulating the prices). And as expected, despite the $4 and more a gallon prices-the radical extremist in the White House today gets a free pass. Where's the outrage ? Where's the outrage about the dollar losing its value again? Remember when the dollar plunged at the end of Bush's last years (after the democrats had taken control of Congress)? Bush got hammered for that. Not a word in the media now about holding the current president responsible. I think every conversation needs to start with a caveat that about 90% of everything the American public reads and hears is coming from sources that universally and vehemently despise conservatives with every fiber in their bodies and are ruthlessly hyping stories they agree with and ignoring stories they don't like. Don't even have a political discussion of any sort until you put that on the table.Liberals: shame on you for pretending this shocking one-sided media does not exist.Shame. shame. Perhaps this year you'll find the courage and integrity to think for yourself and really find our what conservatives believe rather than letting the leftists in the media tell you what conservatives believe, But I doubt it; it's to easy putting your brain on auto-pilot and letting the NY Times/CBS/NBC/ABC/HBO/Wash Post/Newsweek/NPR/ Time/MSNBC, et al, do your thinking for you.

    16. Lisa in Connecticut says:

      Brandon: Thanks, for the link. Admittedly, I'm in the beginning stages of forming my opinions regarding the world's oil supply. I poked a nose at the link, but there seems an inherhent problem… "recoverable" reserves.

      At this point, the reason there hasn't been a more zealous entre into the Green River shale formation is due to cost. It simpy isn't cost effective with the current technology… tht is, until oil prices continue to increase — which undoubtedly they wiil.

      Not to mention, that the technology Shell is pursuing seems to mirror the fracking technology used in natural gas in which recently there was a blowout in Pennsylvania. These are serious environmental concerns that shouldn't be swept aside simply to continue our dependence on oil — foreign or domestic.

      Additionally, the technology requires the use of alot of water — a natural resource that is beyond a doubt the most precious of all resouces other than food.

      That 800 billion barrels? If and when recoveralbe really is only 112 year's supply if we can get it all. The problem is that when we hit the peak — 56 years (if we can recover it) — the prices will again creep up quite rapidly. This is a short-sighted answer.

      I know I'll be dead by then, but I'm thinking about the world my daughter and grandchildren will inherit, and I'm truly saddened by the thought that so few really care about their future.

      We need to refocus our efforts. I love sci-fi and the thought of interstellar travel, but c'mon, there are more pressing issues facing humanity. Poverty. Famine. Genocide. Slavery. Let's take the money we spend on WAR and change the future — lead the world into the next century.

      How about in stead of focusing on making "new" EV cars we find a way to convert existing models to electric… I'm willing to keep my car for ten years to accomplish that. And how about making solar panels affordable to everyone and provide aid to the poor (solar panels) so that we can make a short term investment that provides a lifetime of relief and overall lower costs to the society.

      • Keith says:

        I'm of the frame of mind that if we begin drilling the untapped and often underestimated natural resources that we actually have available to us according to the Department of Energy report that I saw the other day(which said point blank we have hundreds of years of Oil, Clean Coal, as well as Natural Gas) that with the current research that is going on into developing future technologies we will be able to build the future for our kids grand kids and so on. The problem is that without using up some of these untapped resources to lower the costs of energy the average American will not have enough money to put back into our economy and allow it to be used for the very needed replacement energy resources that this country needs. As stated by many wind and solar power are not as reliable as coal, nuclear, oil, or natural gas energy productions. And that is because they are based on what nature does. Do I agree that we need green energy yes… But not at the expense of an entire generation or 5 due to unwillingness to use what's available until better can be produced.
        My point is this the road to a greener future is a long one it will not happen over night because we have not discovered how to make these technologies available and affordable to all. We do however have the ability to give everybody an opportunity to work towards that future. By not tapping into our current resources though we are in fact hindering our own success and progress. In order to make an omelet you really do have to use eggs otherwise it's not an omelet is it? In order to get to that dream of a greener future the one metaphorically speaking where the eggs are completely healthy yolk and all for human consumption we have to use the eggs available to feed us until we can truly develope and mass produce said healthy eggs…current eggs available are of course Coal, Oil, Nuclear Energy, Natural Gas! I'm sorry but hybrid cars, electric cars, and all these other types of alternatively fueled vehicles and our ability to mass produce them at an affordable price and the infrastructure to run them is simply not where it needs to be… Speaking of which these electric cars if it's mandated that all cars have to be electric just how are we to produce said electricity to recharge them with only the use of solar, wind and hydro???? Again our infrastructure is not built to support these technologies so we need to stop pushing so hard to have it today and start working and looking at it as a long term goal but working on it is the key not just griping and complaining about it and making all sorts of crazy mandates and regulations that are tripping us up from what everyone says is our true goal!

    17. allen moser says:

      WE HAVE BEEN THE RICHES COUNTRY IN COAL FOR YEARS THEY HAVE ALREADY PROVED THAT COAL WORKS. THEY DO NOTHING ABOUT IT. THEY HAVE USED PROPANE SINCE 1981 AS I DROVE A SHUTTLE BUS WITH IT IN 1981. THE PROBLEM IS THEY DON'T PUT THE PUMPS IN THE STATIONS NOR DOES DETROIT PUT OUT THE CARS FOR CONSUMERS TO BUY AT A DECENT PRICE. THEY ALSO HAVE NATURAL GAS OUT BUT ONLY THE BUSES USE IT. WE DON'T HAVE ACCESS TO IT. THAT'S THE PROBLEM.amoser4160@aol.com

    18. DONNA says:

      I LIVE IN A SMALL TOWN IN IDAHO. AND WAGES ARE THE PITS HEAR. ITS GETTING TO WHERE I CANT AFORD TO DRIVE TO WORK ANYMORE
      SO AM I NEEDING TO QUIT MY JOB , IF OUR WAGES WERE LIKE THEY ARE BACK EAST, MAYBE LIFE WOULD BE BETTER FOR US. OBAMA YOU SUCK

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