• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Obama's Non-Solution for High Gas Prices

    Gas prices and the approval of President Obama’s management of the issue are heading in opposite directions. As the price at the pump continues to climb, his approval rating for handling gas prices is a meager 26 percent—the lowest of any of the polled questions. Much of what’s led to high prices, such as increased global oil demand and a weak federal dollar, is out of the President’s control; thus, it’s unfair and disingenuous to lay all blame for high gasoline prices on President Obama’s shoulders. The President does deserve criticism, however, for his nonsensical policy proposals (or in some cases, a lack of proposals) that will waste taxpayer and do very little to impact gas prices.

    There are many glaring problems with President Obama’s energy pitch, but worst of all is his doublespeak on subsidies. In a speech on March 9 in Houston, Texas, President Obama said, “So what I’ve said is rather than continue a hundred years of taxpayer subsidies to an industry that’s very, very profitable, let’s double down on our investments in clean energy industry. It’s never been more promising.”

    The President is manipulating language to frame the energy debate to his liking while disregarding the facts. To cover up the inherent inconsistencies in his energy and jobs agendas, President Obama refers to broadly available tax credits as “subsidies” when he’s talking about oil companies, while he refers to actual, massive subsidies to his favored industries as “investments.”

    But he makes a good point and demonstrates why neither fossil fuels nor renewable energy needs subsidies: If producers have an economically viable technology, then they shouldn’t need handouts from Washington in the first place. If clean energy is as promising as the President says it is, then venture capitalists should be foaming at the mouth.

    The problem is that clean energy hasn’t been that promising—even after the government invested billions in green stimulus dollars. Ask Solyndra, SunPower, Tesla, NRG Energy, Nevada Geothermal, FirstWind, Beacon Power, SpectraWatt, Ener1, Energy Conversion Devices, Amonix, A123 Systems, Raser Technologies, Fisker, and Abound. These companies have either filed for bankruptcy or are in dire financial troubles—and they all received taxpayer funds.

    If an energy source is not economically competitive, then the government should not artificially prop up these technologies and energy sources to create a market that wouldn’t exist without the subsidy. This wastes taxpayer dollars and sets back innovation by distorting energy investment allocations. In a free market, these resources would flow toward the most promising technologies, not to those with the most political support.

    We should remove all energy subsidies, including those for oil and gas, not expand them. The Senate sent that message to the President today with the rejection of bills to subsidize natural gas vehicles and extend clean energy tax subsidies.

    President Obama is correct that there is no silver-bullet solution to America’s high gas prices, but one approach we should certainly cross off the list is energy subsidies—or “investments”—by any name.

    Katie Tubb is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Energy, Featured [slideshow_deploy]

    16 Responses to Obama's Non-Solution for High Gas Prices

    1. 1LTLos59 says:

      Introducing, Mr Obscumbo who wants to be known as President Pond Scum. How appropriate his desire to toss muck at the public. I say its time for Mr Algae to GO!!!

    2. Jan Latusek says:

      Utter nonsense to bracket Smith Electric Vehicles with those companies labelled as in dire trouble. Smith is doing brilliantly well. I am among those queueing to buy stock when it becomes available on the Nasdaq stockmarket a few weeks from now. Obama was absolutely right to back this american success story with taxpayers money.

      • Winghunter says:

        Of which you'll lose everything, go on welfare/food stamps and vote for the handouts Obama enables you with while rationalizing some insane drivel of why he lost those billions.

        Oh yeah, with Americans like you, who needs Commies??

      • Jeanne Stotler says:

        Since I drive the the store and doctors mostof my driving is local and with in 10 miles, BUT there are occassions I would like to see my daughter and granddaughters which is over 100 mi, plus I like to to To family reunions which are almost 400 miles, Where am I suppose to get electricity on these routes?? Oh it switches to Gas? Thanks but NO THANKS, first electricity is not cheap, we are on a co-op and our bill has risen steadily, When I drive north to reunions or my daughter, I know where gas is, I will take good old fashion gasoline, you can have your electric. TRUTH, the auto builders have known for over 35 years about motors that were over 50MPG, the big oil c. and the UAW have kept it under wrap.

        • Leslie says:

          Keep blogging about the electric bill,,Jeanne. Winter heat is a absolute necessity for humans, and we could theorethically do without cars or gasoline for cars. But, most people don't realize those of us in suburbs or rural areas, don't have cheap natural gas for home heating. Its either expensive electric heat or propane or even in many older homes back east, home heating oil. These prices march right along with gasoline and oil prices, not natural gas prices. In many States without co-ops the price of electricily and propane can fluctuate more than $1 a gallon, with even a cord of wood skyrocketing for winter heat.
          I say until every American has "affordable" method of heating in winter, without all the 40 years of fluctuation and diaster of creating crisis and financing undependable and unreliable windmills and solar, without government help for the very taxpayers who work and try and support their families, no new subsidies for "science or environmental companies". .
          ''

      • Precisely wrong, Jan. If Smith is doing "brilliantly well" venture capital will seek out it's investment, as you prove with your actions. Subsidies aren't needed and serve only to distort the market signals that prevent malinvestment. If it illegal for me to force you to invest in a business of my choosing, what in the Constitution grants the goverment the right to do exactly the same thing?

      • Chippy55 says:

        We've never heard of Smith Electric Vehicles. You can't seem to comprehend the fact Obama had to give a $7,500 credit on a Chevy Volt (which he has increased to $10,000 now) and they still can't sell, in fact they have now ceased production. It's all pie in the sky. In order to charge the batteries you have to plug it in every night, kinda hard to do when you park on the street. You are charging the vehicle with electricity made by burning coal and Obama said during his campaign that he intended to bankrupt the coal industry. Instead, all 7 (or more) solar companies went bankrupt but the executives at those companies got bonuses.
        Some of the credits for those Chevy Volts were taken by the Chevy dealer, and they then sold the new car as a used car. Who in their right mind is going to give up a $7,500 credit on their tax return?? It's just more corruption that is rampant throughout this administration including tax chat Geithner.
        The wind farms cause noise pollution at 23 mph which is the optimum speed, and they have been shut down in the northeast due to noise. The blades of the wind farms in California are responsible for killing thousands of birds each week but the Liberal media won't tell you this fact. Less birds and bats means more bugs, it's upsetting the balance in nature.
        Everything that Obama touches or gets involved with goes bankrupt, including the maker of his inauguration tuxedo, and every time he goes to a restaurant it goes out of business.
        He's lying when he says oil production has increased under him, there still is a moratorium on drilling in the Gulf and both coasts are off limits, he nixed the Keystone XL pipeline, and an estimated 2 trillion barrels sits untouched in shale rocks.

    3. Winghunter says:

      "…thus, it’s unfair and disingenuous to lay all blame for high gasoline prices on President Obama’s shoulders…"

      Yes, Obama knows ALL about that:

      15X's Obama & Top Dems (Not including MainSlime Media's echo chamber) Blame Bush For Gas Prices http://www.youtube.com/watch?feature=player_embed

    4. Stirling says:

      Since the issue for taxpayers is each side does not want their taxpayer monies going to subsidize the other, the only middle ground is do away with both and let the free market (citizens) vote with their wallets. Sorry green movement you can't take away the oil industry subsidies (and keep your subsidies) and expect people to not to be offended by the hypocriscy. To the green movement: please spend your own money and leave my money alone.. you offend me in thinking you know whats better for me then I do myself.

    5. Lloyd Scallan says:

      If oil companies would lose their tax credits what would the pump price be? If Obama would have endorced drilling three and a half years ago, instead of making every effort to shut it down, we would see the benefits today. Just the prospect of more oil in the market, will produce lower pump prices. When Obama says "we cannot drill our way out of the problem", he's deliberately lying. Drilling IS the "silver bullet". How do we get crude to produce gasoline? This country now sits on more oil than the entire Middle East. Yet Obama refuses to allow drilling on public lands or allows an easy drilling permiting process because he determined to force America away from fossil fuels, regardless of the damage his actions are doing to our economy. How do we put "green energy" in our gas tanks. How can "green energy" be used to produce the thousands of products that depends oil. How can "green energy" bring down the pump price? It cannot! To suggest all of the blame for high pump prices is not the fault of Obama, is not only "disingenuous" but shows a total lack of understand how oil markets operate.

    6. Guest says:

      You cannot solve problems with your butt parked on your hands. From that perspective there never is any solution. Self fulfilling prophecy.

      America's greatness comes from the development of dense cost effective energy distributed easily everywhere.

      It does not come from low density, poor efficiency high cost green sources with poorly developed infrastructure and high costs of distribution. that threaten to bankrupt us all.

    7. Maynard says:

      The Fed's QE and QE2 get part of the blame for dollar weakness. Obama has no say in what the Fed does?

    8. Guest says:

      We subsidize oil to the tune of trillions of tax dollars. Middle East oil is protected by the strength of the US military. Let the producers pick up that cost and then we can have a better idea of the real cost of oil.

    9. Bobbie says:

      Let's see, the president knows when the cost goes up here and there but can't do a darn thing to "change" it. An honest president would consider the man made global warming hoax and lift all costly ignorant regulations in regard! another easy solution! the president doesn't want lives made easier. He's in it for trouble making and good at it. I wish he'd quit his patronizing, condescending imagination he puts on hard working people. America is only drilling in the private sector while obama teases the masses with misinformation, hording all natural resources on government land for crisis control sake! That's why he over regulates without reason, private land. Government control!

      • Leslie says:

        There is "to know" and to really know. Unfortunately, most Presidents don't have to sit down every month and figure a budget or pay for their gasoline, heat and groceries. Presidents are elected and further insolated from everyday, actual experiences of average people, by not just their personal wealth but by the Office and having a taxpayer paid staff and expense account for their food, gas etc. We have been through all of this before, in the 70's and 80's with both oil and eleectric prices, killing low income and average income states and citizens. Then too, it was build green, change to energy efficient etc etc, but now many of us are on our 2nd and third furnaces, refrigerators and energy efficent models, with no way to afford a windmill for the front yard or more solar on the roof. Everytime you put in a low flow toilet or zero schape the yard, the utility company raises the price, due to lost of revenue. What a vicious cycle!

    10. Carol,AZ says:

      The Prez, AKA, " master manipulator" continues to speak with a clear stream of slime coming out of his mouth .
      Could that be " the algae energy source": he's currently mouthing off about , while all of America watch the gas prices climb to $4,00 ..
      Yes you'll so correct per example in this article: everything he touches is failure.
      Our community organizer views himself as some self-appointed ," back to the future" green machine.
      A place to start here in America is to build more refineries along with our natural resources , which also would help to generate jobs.
      We sit on "more natural energy " as stated above by Lloyd, than most of the world.
      Our self-appointed "green giant" and his duplicity, to refuse to develop our natural resource is another pig pile in a long list of failures.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×