As gas prices soar, politicians point fingers but little relief in sight
This article first appeared in the St. Louis Beacon, Feb. 23, 2012 - WASHINGTON — As gas prices soar at the pump, Republicans are blaming the White House, President Barack Obama is lashing back at the GOP for a shortsighted “drill, baby, drill” policy, and others are calling for tapping oil from the “strategic reserve.”
In the St. Louis region, gas prices have been rising steadily — averaging about $3.56 a gallon and likely to continue rising by 15 to 20 cents a gallon over the next week or two, according to GasBuddy.com. Missouri’s average gas price was $3.46 a gallon, in Illinois $3.67.
After GOP presidential contenders lashed out at Obama for the high gas prices and a flawed energy policy at Wednesday night’s debate — echoing recent comments by Republican congressional leaders — Obama struck back at a speech Thursday at the University of Miami, asserting that the GOP’s strategy is limited to drilling for oil.
“Anybody who tells you we can drill our way out of this problem doesn’t know what they’re talking about — or just isn’t telling you the truth,” Obama said. He called for an “all-of-the-above” approach that involves hiking domestic oil production, developing alternative fuel sources, and fostering more efficient cars and trucks.
But Republicans — many of whom have been using the same “all of the above” phrase to describe their own approach to boosting energy production — said Obama’s actions, such as rejecting the Keystone XL oil pipeline, have not matched his rhetoric.
“In the three years since President Obama took office, national gas prices have doubled while families and job creators struggle to make ends meet. Meanwhile, Americans are bracing for fuel costs to hit $4 a gallon this summer,” U.S. Sen. Roy Blunt, R-Mo., said in a statement.
“We don't need more rhetoric. We need to pursue more domestic energy production, including biomass, natural gas, and clean-coal if we are going to put more people back to work and position America for greater energy independence.”
U.S Rep. John Shimkus, R-Collinsville, who is in the GOP leadership of the House Energy and Commerce Committee, echoed that criticism. He lashed out at Obama for rejecting Keystone — which Shimkus said would not have an immediate impact on oil prices but would have a medium-term impact — and for failing to ease regulations that limit oil and natural gas production.
“If you want to lower oil prices, you need more supply,” Shimkus said in an interview. “And I think this administration bears some responsibility for high gas prices.”
Meanwhile, Sen. Claire McCaskill, D-Mo. — saying that provocative actions by Iran are major factors in driving up energy prices here — urged Obama in a letter to release oil from the nation’s Strategic Petroleum Reserve and take other steps to lower fuel prices.
“While the nation’s economy slowly recovers and Americans continue to face serious financial challenges in their everyday lives, I believe you must act to provide relief in gas prices,” McCaskill wrote Thursday. “Specifically, I urge you to act without delay to release adequate reserves of oil from the Strategic Petroleum Reserve (SPR) ... to stabilize gas prices here at home now.”
In the past two decades, McCaskill said, U.S. presidents have ordered releases from the strategic reserve three times, each time resulting in lower fuel prices. McCaskill also called for approval of the Keystone XL “as soon as possible” and an end to tax subsidies to Big Oil firms — suggesting that the companies should use the value of their tax credits to take actions to bring down fuel prices.
The strategic oil reserve now holds about 276 million barrels of crude, according to a policy brief by Philip Verleger of the Peterson Institute for International Economics — considerably more oil than the U.S. is required to hold in reserve under international agreements. If oil prices continue to soar, Verleger writes that the U.S. could probably sell surplus crude on the world markets to lower prices and help avoid serious economic damage.
But many experts contend that the strategic reserve should only be used during a sudden and severe loss of oil supply, such as in the aftermath of Hurricane Katrina, which temporarily halted nearly a quarter of U.S. oil production in the Gulf of Mexico.
“That oil reserve is there for an emergency, such as if there is an altercation in the Persian Gulf area and the sea lanes are closed,” Shimkus told the Beacon. “It would be a mistake to tap into that reserve now.”
McCaskill told reporters Wednesday that “with Iran threatening global markets, oil companies are doing what they always do — racking up their profit margins at the expense of American taxpayers. That’s why we need to be breaking ground on projects like the Keystone pipeline, to boost our energy production here at home and that of our allies.”
She added: “It’s unacceptable to me that Missouri families are being held hostage by Big Oil and Middle East dictators. . . . Domestic production here in the U.S. is at a record high, so we’re headed in the right direction.”
In his talk Thursday in Miami, Obama said the U.S. is now producing more oil than at any time in the last eight years — with a record number of oil rigs. In recent months, his administration has opened new sectors of the Arctic Ocean and the Gulf for more exploration. But Obama said that increased domestic production cannot fully offset international trends that drive up oil prices, such as instability in the Middle East and China’s rapidly growing energy demands.
Vowing to “keep on producing more homegrown energy,” Obama said that unfortunately, “it’s not enough” to keep gas prices low. “The amount of oil that we drill at home doesn’t set the price of gas by itself. The oil market is global; oil is bought and sold in a world market.”
Similar to last spring, Obama said, “The single biggest thing that’s causing the price of oil to spike right now is instability in the Middle East — this time around Iran. When uncertainty increases, speculative trading on Wall Street increases, and that drives prices up even more.”
But Blunt, Shimkus and other Republicans said Obama has not done nearly enough to hike domestic energy production. “His record simply doesn't match his rhetoric” on oil prices and energy in general, Blunt said.