Seven Gas Facts Obama Can't Escape

[PapaG]

http://biggovernment.com/whall/2012/02/27/7-gas-facts-obama-cannot-escape/

President Barack Obama cannot escape the following seven gas-related facts:

1. In September 2008, Barack Obama’s”Nobel-prize winning physicist” of an Energy Secretary, Steven Chu, told the Wall Street Journal: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

2. In 2008, then-candidate Barack Obama admitted that, like his future Energy Secretary Mr. Chu, he believed that high gas prices would be a good thing because they would force Americans to ween themselves off of oil, but that he would have “prefered a gradual adjustment.”

3. On January 19, 2009, the day before Barack Obama was sworn in as President of the United States, gas prices were $1.84 a gallon. As of February 20, 2012 a gallon of gas cost $3.59.


4. As Senator Kay Bailey Hutchinson points out, “Offshore drilling permits are being issued at less than half the rate of the previous administration. The average number of leases issued on public lands is less than half than during President Clinton’s term.”


5. In 2008, Barack Obama seemed perfectly comfortable with soaring energy prices if they meant curbing green house gas emissions. As Mr. Obama confessed: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”


6. As seen in the video below, Obama’s own 2008 campaign rallies actually cheered higher gas prices because they would “force us to think about changing the culture to create more emphasis on mass transportation.” Following the sustained applause, then candidate-Obama proceeded to laud Europe (not unlike his future Energy Secretary Steven Chu) for its rail system.

7. Try as he might, President Obama’s campaign will try to distance themselves from the fact that a central pillar of Mr. Obama’s 2008 campaign was a pledge to reduce the “pain at the pump” caused by high gas prices. However, videos such as the one below reveal the extent to which Mr. Obama promised that, if elected, he would bring down the cost of gas for “everyday Americans.”

Missing no opportunity to invoke class warfare, Mr. Obama said: “For the well-off in this country, high gas prices are mostly an annoyance. But to most Americans, they are a huge problem, bordering on a crisis. Here in Indiana, gas costs $3.60 a gallon.”

... continued at link, and videos at link ...

 

[PapaG]

Can't wait until the summer driving season begins, and Iran shuts down the Strait of Hormuz. $6/gallon by July 4th?

http://www.portlandgasprices.com/GasPriceSearch.aspx

 

[BLAZER PROPHET]

I’m not going to justify Obama’s remarks, but I do this they need to be placed into a certain perspective.

People have to look at the long term plan- Less dependency on oil and more on sustainable types of energy. The sad fact of the matter is that until prices rise on oil and gas there is no true incentive to develop more fully alternative methods. Tax benefits didn’t help. Government money for start-ups didn’t help. Now, I will admit, the latest fiasco with Solyndra may have been more of a “take the government money and run” than a true desire to create alternative methods of energy, but the point remains that government money isn’t helping.

A time will come when it will simply be too expensive to use gas & oil on a meso scale. We have to have the other methods in place for that time. That means developing them fully now. And I think that’s where Obama is coming from.

 

[chris_in_pdx]

I’m not going to justify Obama’s remarks, but I do this they need to be placed into a certain perspective.

People have to look at the long term plan- Less dependency on oil and more on sustainable types of energy. The sad fact of the matter is that until prices rise on oil and gas there is no true incentive to develop more fully alternative methods. Tax benefits didn’t help. Government money for start-ups didn’t help. Now, I will admit, the latest fiasco with Solyndra may have been more of a “take the government money and run” than a true desire to create alternative methods of energy, but the point remains that government money isn’t helping.

A time will come when it will simply be too expensive to use gas & oil on a meso scale. We have to have the other methods in place for that time. That means developing them fully now. And I think that’s where Obama is coming from.

That doesn't jive with "DRILL BABY DRILL!" though? There's still too much money on oil, and not enough far-sighted people in his country.

 

[PapaG]

That doesn't jive with "DRILL BABY DRILL!" though? There's still too much money on oil, and not enough far-sighted people in his country.

Being far-sighted, which all energy companies are anyhow, does nothing to alleviate gas prices next week.

We can talk all we want about algae, and money is being invested in it, but it is literally decades away from being cost-effective for any company to go all-in on without gov't subsidies.

 

[MARIS61]

You're rightfully outraged, but wrongfully placing the blame.

As with every other way the average American is being screwed, it's all being done by the 1%.

Gas prices are set artificially high by speculators on Wall Street. Presidents really can't do much of anything to stop it. Supply lines affected by wars have little influence on it. It's just another Ponzi scheme by the 1%.

Congress acted to slow it down with the Dodd-Frank Act, but the 1% owns most of the judges in our glorious justice system and they are overuling everything from the Bill of Rights to the definition of "a person".

http://www.mcclatchydc.com/2012/02/27/140158/federal-judge-weighs-whether-to.html

 

[MARIS61]

I don't know where you got the $1.84 figure but gas was $1.20 when I moved to Beautiful Central Oregon a decade ago, shot up over $3.00 in a matter of months under Bush/Cheney, and has never been below $2.25 since.

 

[BLAZER PROPHET]

There's still too much money on oil, and not enough far-sighted people in his country.

I agree with with the first half, but not the second. I think we have plenty of far sighted people as well as far sighted energy companies (to even include oil companies). It's just that oil is still cheaper to use as a primary source of energy for vehicles and manufacturing. Until that changes there isn't much of a chance in really seeing large scale changes in energy in that arena.

 

[BLAZER PROPHET]

I don't know where you got the $1.84 figure but gas was $1.20 when I moved to Beautiful Central Oregon a decade ago, shot up over $3.00 in a matter of months under Bush/Cheney, and has never been below $2.25 since.

We know, we know already- it's all Bush's fault. Don't you have a different record to spin?

 

[julius]

We know, we know already- it's all Bush's fault. Don't you have a different record to spin?

ironically said in a thread that is blaming stuff on Obama.

 

[PapaG]

ironically said in a thread that is blaming stuff on Obama.

There is no blame in this thread. Just facts that either Obama or his cabinet members have said about gas prices.

Dispute the article if you have a problem with it.

 

[EL PRESIDENTE]

got this from peter schiff's newsletter today:

This month, as unleaded gasoline prices increased for 17 consecutive days (to a national average of $3.647 per gallon - up 11% thus far this year) and West Texas Intermediate crude joined Brent crude in breaking through a $100 per barrel level, energy prices emerged as a full blown political issue. While President Obama conveniently claimed that rising prices were the consequence of an improving economy (they're not, and it isn't) Republican fingers began to point sanctimoniously at current drilling policies. And while none of the accusers had any idea why prices were actually going up, the award for the most dangerous 'solution' must go to Bill O'Reilly at Fox News. The master of the "No Spin Zone" announced that high pump prices could be permanently brought down by a presidential order to restrict exports of refined gasoline. Not only does Mr. O'Reilly's idea demonstrate contempt for the U.S. Constitution but it also displays a thorough lack of economic understanding.

Oil and gas prices are high now for a very simple reason: the U.S. Federal Reserve has gone on an unapologetic campaign to push up inflation and push down the value of the U.S. dollar. Just last week on CNBC James Bullard, the President of the Federal Reserve Bank of St. Louis, stated this unequivocally. What is somewhat overlooked is the degree to which an inflationary policy at home creates inflation abroad. Many countries who peg their currencies to the U.S. dollar need to follow suit with the Fed. As China, for example, prints yuan to keep it from appreciating against the dollar, prices rise in China. This is especially true for commodities like crude oil.

Many critics, such as Mr. O'Reilly, have relied on a limited understanding of the supply/demand dynamic to question why gas prices are currently so high at home. With domestic gasoline production at a multi-year high and domestic demand at a multi-year low, he logically expects low prices. But he fails to grasp the fact that the price of gasoline is set internationally and that U.S. factors are only a component.

O'Reilly's loudly proclaimed solution is to limit the ability of U.S. refiners (and drillers) to export production abroad. If the energy stays at home, he argues, the increased supply would push down prices. Although O'Reilly professes to be a believer in free markets he argues that oil (and gasoline by extension) is really a natural resource that doesn't belong to the energy companies, but to the "folks" on Main Street. What good would "drill baby drill" do for us, he argues, if all the production is simply shipped to China?

First off, the U.S. government has no authority whatsoever to determine to whom a company may or may not sell. This concept should be absolutely clear to anyone with at least a casual allegiance to free markets. In particular, the U.S. Constitution makes it explicit that export duties are prohibited. Furthermore, energy extracted from the ground, and produced by a private enterprise, is no more a public good than a chest of drawers that has been manufactured from a tree that grows on U.S soil. Frankly, this point from Mr. O'Reilly comes straight out of the Marxist handbook and in many ways mirrors the sentiments that have been championed by the Occupy Wall Street movement. When such ideas come from the supposed "right," we should be very concerned.

But apart from the Constitutional and ideological concerns, the idea simply makes no economic sense.

In 2011 the United States ran a trade deficit of $558 billion. For now at least America has been able to reap huge benefits from the willingness of foreign producers to export to the U.S. without equal amounts of imports. China supplies us with low priced consumer goods and Saudi Arabia sells us vast quantities of oil. In return they take U.S. IOUs. Without their largesse, domestic prices for consumers would be much higher. How long they will continue to extend credit is anybody's guess, but shutting off the spigots of one of our most valuable exports won't help.

In recent years petroleum has become an increasingly large component of U.S. exports, partially filling the void left by our manufacturing output. According to the IMF, the U.S. exported $10.3 billion of oil products in 2001. By 2011, this figure had jumped nearly seven fold to more than $70 billion. How would our trading partners respond if we decided to deny them our gasoline?

Keeping more gasoline at home could hold down prices temporarily, but how much better off would the "folks" be if all the prices of Chinese made goods at Wal-Mart suddenly went up, or if such products completely disappeared from our shelves because the Chinese government decided to ban exports that they declared "belonged to the Chinese people?" What would happen to the price of energy here if Saudi Arabia made a similar decision with respect to their oil?

But most importantly, limiting the ability of U.S. energy companies to export abroad will do absolutely nothing to improve the American economy. As a result of our diminished purchasing power, American demand for oil has declined in relation to the growing demand abroad. Consequently, we are buying a continually lower percentage of the world's energy output. Consumers in emerging markets can now afford to buy some of the production that used to be snapped up by Americans. If U.S. suppliers were limited to domestic customers, then prices could drop temporarily. But what would happen then?

With the U.S. adopting a protectionist stance, and with gasoline prices in the U.S. lower than in other parts of the world, less overseas crude would be sent to American refineries. At the same time lower prices at home would constrict profits for domestic suppliers who would then scale back production (and lay off workers). The resulting decrease in supply would send prices right back up, potentially higher than before. The only change would be that we would have hamstrung one of our few viable industrial sectors. (For more about how diminishing supplies could exert upward pressures on a variety of energy products, please see the article in the latest edition of my Global Investor newsletter).

Mr. O'Reilly can spin this any way he wants it, but he is dead wrong on this point. It is surprising to me that such comments have not sparked greater outrage from the usual mainstream defenders of the free market. To an extent that very few appreciate, America derives a great deal of benefits from the current globalization of trade. Sparking a trade war now would severely reduce our already falling living standards. And given our weak position with respect to our trading partners, such a provocation may be the ultimate example of bringing a knife to a gun fight.

Rather than bashing oil companies, O'Reilly, as well as other frustrated American motorists, should direct their anger at Washington. That is because higher gasoline prices are really a Federal tax in disguise. The government's enormous deficit is financed largely by bonds that are sold to the Federal Reserve, which pays for them with newly printed money. Those excess dollars are sent abroad where they help to bid oil prices higher.

For years, mainstream economists argued that as long as unemployment remained high, the Fed could print as much money as it wanted without worrying about inflation. The argument was that the reduction in demand that results from unemployment would limit the ability of business to raise prices. However, what those economists overlooked was the simultaneous reduction in domestic supply that results from a weaker dollar (the consequence of printing money).

I have long argued that neither recession nor high unemployment would protect us from inflation. If demand falls, but supply falls faster, prices will rise. That is exactly what is happening with gas. The same dynamic is already evident in the airline industry. Fewer people are flying, but prices keep rising because airlines have responded to declining demand by reducing capacity. Since seats are disappearing faster than passengers, airlines can raise prices. At some point Americans will be complaining about soaring food prices as much more of what American farmers produce ends up on Chinese dinner tables. Because the Fed is likely to continue monetizing huge budget deficits, Americans are going to be consuming a lot less of everything, and paying a lot more for those few things they can still afford.

 

[MARIS61]

We know, we know already- it's all Bush's fault. Don't you have a different record to spin?

You're suggesting I should lie and deceive you rather than point out what you should already know if you had been paying attention?

 

[MARIS61]

got this from peter schiff's newsletter today:

Schiff's an idiot, and I side with Bill O'Reilly on this matter.

Oil is a natural resource vital to our country's current survival, and I would go a further step and nationalize it's production from any wells that are on public land. The same goes for timber, mining, natural gas, and hydroelectricity. US Mail, telephone, utilities, and healthcare should also be government run.

The vast amounts spent on subsidizing these industries has done nothing for Americans and is a huge gift from taxpayers to a couple hundred billionaires, many of them not even Americans.