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Matthew Hurt: Obama able to cut gas costs
I am sure it comes as no surprise when I say gas prices are increasing at an alarming rate. After all, many experts predict the price for a gallon of gas to cost more than $5 per gallon by summer.
In fact, prices at some gas stations in Florida have already reached that amount, approaching the $6 mark. While people are feeling the pain at the pump, these high gas prices have a ripple effect on other aspects of the economy.
For example, virtually every product you buy, whether it be food, medicine or shampoo, is transported to local stores by trucks that run on (you guessed it) gasoline. The transportation industry is also highly susceptible to expensive prices at the pump.
Other sectors of the economy also start to suffer when gas prices jolt upward. Americans, with less money in their wallets, will cease eating at restaurants as often, hurting the food service industry. Leisure activities will also become more of a rarity, hurting industries such as tourism.
I would like to see President Barack Obama take leadership on this issue. He needs to work on lowering the price of gas as much as he can. This may seem unrealistic, as many think the president cannot lower prices, but that notion is untrue. While there are external factors affecting the petroleum industry out of the president’s hands, there are several things he could do domestically to bring gas prices down, even if by a few cents.
Obama could reconsider his opposition to the Keystone XL pipeline — this seems to be one of the most obvious remedies to the situation.
There was no reason for the president to reject the pipeline. Experts argue the pipeline would have given American taxpayers thousands of barrels of oil each day, imported from a politically stable and friendly country. It would not only alleviate the increasing cost of foreign oil, but also create domestic jobs.
Even labor unions and some Democratic Congress members wanted the pipeline. Instead Obama demonstrated a lack of leadership by pandering a small amount of environmentalists in Nebraska.
There are already thousands of miles of pipelines across the country, and quite frankly, I do not think major oil spills in Nebraska or Kansas are big concerns. On the other hand, not being able to afford a tank of gas is an issue for most Americans.
Additionally, the president could rally members of his own party in Congress on the issue, as the Republicans already have. Although in a bipartisan manner, of the nearly 30 job-creation bills that have passed in the House, the Pioneers Act has not been voted on in the Senate.
Congressman Morgan Griffith of Virginia’s 9th District, whose jurisdiction includes Blacksburg, said, “This bill would cut through the bureaucratic red tape to ramp up energy exploration and production in the United States, creating new jobs in the process.”
The bill would lift drilling moratoriums that cover nearly the entire East and West coasts. It would also open up a measly three percent of Alaska’s ANWR to oil exploration and drilling, which is small enough so as to not concern you polar bear fans.
Even without the act, the president could lift the drilling moratoriums on the coasts himself, but he refuses.
Oil producers in the Middle East and Africa do not want to see the United States pass the legislations. This would result in cheaper oil prices on the international market and lower prices at the pump. It would also instill fear in the minds of the OPEC leaders toward the U.S. reduction of imported oil consumption.
Obama can take action that would help lower gas prices. He needs to step up and be a leader on this issue, which will also facilitate a speedier economic recovery.
Dennis Jacobe, chief economist at Gallup in Washington, D.C., put it this way: “If the price goes past four dollars a gallon, that will slow the economy.”
Unless Obama can uphold our traditional American economic direction and increase his party’s concern for this issue, prepare for a slow down.
Jason Campbell:
A version of this article appeared in the Feb 24 issue of the Collegiate Times.
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while i agree obama has nothing to do with gas prices, i personally think you are way off the mark for suggesting that a growing economy is the reason for increased gas prices. in case you haven't realized our economy isn't exactly growing at any pace relative to the increase in prices. the iran situation might play into the prices because oil is sold as futures options contracts so that means they anticipate a reduced supply in the future which means higher prices now. but iran is small potatoes and we can get oil from anywhere in the world - no matter where it comes from or which kind of oil it originated from gas is all the same price at the pump (which further proves it doesn't matter if it is domestic oil or not - may help because reduced costs in the supply chain could translate into undercutting other suppliers, but then there is also the temptation to sell it at the market rate and just produce less). we'll never run out of oil, when supply is tight prices will go up to make it profitable drill for deeper or process more difficult kinds of oil and if people can't afford that then as a business the decision is to exit the industry. finally, the only way for oil prices to decline is for people to find better options for transportation and for our energy sector to demand less of it.
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and just as a side note: i find it hilarious that such a liberal says something like - "...living on loan from future generations" in a bad way. please, we've been doing that since we started spending so much on social programs by increasing the deficit and debt ceiling recklessly.
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Iran contains 10% of the world's proven oil reserves, and is the fourth largest producer in the world. Hardly small potatoes when we're talking about only a 10% rise in gas prices.
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Fact: Global production and consumption drives oil prices.
Fact: A region that produces oil, not necessarily one that the US buys oil from, can influence prices by restricting production/output.
Fact: Turmoil in the Middle East is a significant contributor to the rise in the price of crude oil in the last decade.
Fact: George Bush created an unstable region, thus driving up the price of oil around the globe.
Fact: Speculation has as much to do with the increase in gas prices as the actual production/output.
Fact: Republicans would never let legislation through that allowed the government to regulate or reduce profits of the oil companies because they receive lots of campaign funding from "Big Oil".
Fact: The Keystone XL pipeline project would take a decade to reduce the cost of gas, and the jobs created by the project are the same jobs Republicans slammed Obama for creating during the stimulus: Temporary construction jobs.
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Political opinions aren't fact. FACT: claiming something to be fact doesn't make it so. Maybe you should follow up your FACT with SOURCE. Democratic underground doesn't count.
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As far as the keystone pipeline goes there's a point you're missing altogether. The republicans wanted to reduce the deficit and not increase spending. So in slamming the temporary construction jobs they were saying they didn't want tax payer funded money to pay for them. The keystone pipeline is private and thus it would create private sector temporary construction jobs which is a no brainier anybody should say yes to. There's a huge difference with creating temporary construction jobs with taxpayer money and letting some private sector company decide to invest in jobs with their own money. I do agree though that it would not have helped gas costs any time in the near future. Also, gwb did not make that region unstable. Learn some history.
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"I do not think major oil spills in Nebraska or Kansas are big concerns."
Oh, well that alleviated any concern I had.
What about the republican governor disagreeing with the project? Do you realize how much grain we grow in the Great Plains, not only to feed the US, but export to the rest of the world? Guess where the water to grow those crops comes from...
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I felt an odd sensation of Deja vu reading this article. It reminded me of a long time back in 2008 when Bush signed an order lifting a ban on offshore drilling and opening up the Alaskian territories.
There are a predicted 75 billion barrels to be gained in Alaska. The republicans in 2004-2008 claimed opening this area could increase global oil output by 1%, decreasing realized gas costs by $0.03-$0.05 per gallon. And that is a "best-case" estimate, used to sell the idea to the public. The democrats are getting lower estimates, but the point is made.
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when the price of gas increases, doesn't it imply demand is going up? Aren't factories creating more products, running more engines, pumping more chemicals, soldering more transistors, and using more fuel?
It's all rhetoric here, but the fact stands: Production is increasing, jobs are getting made and people are buying things that they think make them happy. However, it's not entirely in America. So here is a solution that allows you to preserve your way of cheap gasoline: convince the citizens in other growing countries like China, Brazil, and India who are starting to get a taste for the american way of life--buying Ipad's and McDonald's and personal vehicles--that their consumerism is causing you pay too much to drive to work.
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