Snap Fact #192 - President Obama’s Energy Program Will Have Great Long Term Effect But Little In The Short Term!

Post date: May 16, 2012 2:37:23 AM

Snap Fact #192

President Obama’s Energy Program Will Have Great Long Term Effect But Little In The Short Term!

There is no doubt the President Obama’s long term strategy, if played through, will have a profound effect on long term energy prices. The foundation pillars of his plan are; building production, cutting consumption, and developing alternative energy sources. Today’s Snap Fact is not meant to deal with the long term aspects, that subject has been, and will be, addressed in other Snap Facts. 

The Rational Majority doesn’t believe that short term gas price fluctuations are much in the control of the President. There is an intricate spider’s web of supply and demand factors that interweave with one another to move prices up or down.

So if the President has little, if any, power to control gas prices, why would we fashion a Snap Fact to memorialize falling gas prices as one of the President’s accomplishments? The answer is that the President got crucified by his opposition as the prices crept up in the first quarter of 2012. You couldn’t turn around without being hit be some report that gas had gone up a penny, nickel, or dime – and it was all Obama’s fault. 

Now that prices have declined, even if only temporarily, it is appropriate to give the President an equal share of unearned credit as he received unmerited blame. It is estimated that fully 2/3 of Americans still believe that the President is doing a bad job regarding gas prices, even though prices have dropped sharply recently. That’s how effective the discrediting campaign was. 

By mid-May 2012 it became apparent that gas prices had peaked a few cents under the $4.00 level at the beginning of April. It became clear that they were heading south just when the prognosticators of only a few months ago were screaming that they would be going further up. Predictably, as prices declined this topic fell off of the Republican radar screen like a lost plane in the Bermuda Triangle.

The same Wall Street Journal that colluded with the rest of the FOX network to blame the President for the increases, now acknowledged that the variety of market forces that should have been blamed for the rise were now the cause of the drop. 

Their scholarly analysis did not give President Obama even a whisper of credit for the reversal. An alert observer might recognize a pattern here. Blame Obama when something goes wrong; give him no credit when something goes right. Here is a little of what the Journal now has to say:

The Wall Street Journal – As Gas Prices Fall, a Sigh of Relief

Gasoline prices fell for the fifth consecutive week, extending a sharp decline that has eased fears that prices would soon top $4 a gallon at the pump. The average price of regular gasoline dropped to $3.790 a gallon as of Monday, the U.S. Energy Information Administration said, down 3.8% from the 2012 peak of $3.941 reached April 2. Many of the forces that drove gasoline up are reversing, and that is helping bring prices back down, though they still remain near record highs. Tensions over Iran’s nuclear program have eased, while softening economies in the U.S. and Europe have curbed demand. At the same time, some refineries pegged for closure are coming back online, and bottlenecks in the supply of crude oil are becoming unclogged. The changes have led analysts to temper their price predictions for the summer driving season. A few months ago, some were saying pump prices could shoot above $4 a gallon and even reach $5 by the summer, but now they say that is highly unlikely.

The above is what they are printing in May. There is no mention of the President. However in mid-March the opposition was screaming for the President’s scalp. They finally had a campaign issue with legs. Everyone in the country knew that gas prices were up and the “experts” screamed that they were going higher – some predicting $5.00 a gallon by the summer. 

The FOX media machine was trumpeting each one dollar rise like a bull elephant. On March 17th the most responsible link in the Murdock chain, the Wall Street Journal, gave a litany of reasons why prices would shoot through the $4.00 mark like an uncapped oil well. 

You can click the “Fox News” link provided below in the Sources and read the entire story. Here is the flavor of this article from their misguided conclusion: 

“As Northeastern refining capacity declines, it will force distributors in the region to buy gasoline from elsewhere, pushing up prices across the country and increasing the likelihood of price spikes, government officials and analysts warn. 

"There's now going to be a question if we can get enough gasoline into the East Coast for summer," said David Greely, an energy analyst at Goldman Sachs Group Inc. The U.S. Energy Department has warned a shortfall could develop as early as July”. 

It sounded good at the time but compare it to what the same paper was saying in April. 

As early as the end of February, President Obama was under such heavy attack for allowing, or even causing, the price of gas at the pump rise, that he felt compelled to defend himself and his long term energy strategy. 

The President maintained that there “are no quick fixes to this problem” and that an all-of-the-above approach is the “only real solution” to solve the nation’s energy challenges. 

Using the facts to counter the bluster, President Obama pointed out that his administration’s actions are not the cause of rising oil costs. One such fact he presented is that “America is producing more oil today than at any time in the last eight years”. He also noted that dependence on foreign oil was under 50 percent in 2010 - the first time in more than a decade. 

The President also stated that, “While there are no short-term silver bullets when it comes to gas prices, I’ve directed my administration to look for every single area where we can make an impact and help consumers in the months ahead, from permitting to delivery bottlenecks to what’s going on in the oil markets.” He also called for an end to oil and gas subsidies and for Congress to renew clean energy tax credits. He also called for Congress to investigate the effect of the role of speculators on energy prices. 

The Republicans think they can have it both ways, we don’t. While it is possible that some of the President’s short term actions have helped, he will take no credit and won’t give him any until and unless proof emerges. All we will say is that gas prices went up under President Obama and now they are going down. Although we won’t call this an Obama accomplishment, we invite those who heaped blame on the President for the rise, to publicly thank him for the reversal.