By Robert Schlesinger |
President Obama must be feeling the pain at the pump, too. For the past week, he's been trying to claim the offensive on the gas price debate, telling the American people, "Anyone who tells you we can drill our way out of this problem doesn't know what they're talking about—or isn't telling you the truth," saying there are no "silver bullets" or "quick fixes." But that's not entirely true.
The president is right about one thing: Domestic action to increase production will not lower gas prices set on a global market. Between growing demand in the developing world and the power of OPEC, Americans can expect gas prices to stay relatively high for the foreseeable future. But that alone is not the problem. The problem is that Americans are struggling every day to pay for high-priced gasoline. And that is something the president can certainly do something about.
A 2011 Wood Mackenzie study compared Obama's energy policies with an alternative pro-development policy that would open more lands for drilling, ease permitting, approve the Keystone XL pipeline, leave fracking to the states, etc. The results? By 2015, current policies will have cost the country 1.27 million barrels of oil equivalent per day, $36 billion in government revenue, and $100 billion in private incomes.
I've examined this point further elsewhere (and found that Obama could turn government revenue from drilling into a tax credit that drops the price of gasoline by $1.80 a gallon), but the real point here is that domestic oil and gas development has a real, material, and significant impact on domestic wealth creation, jobs, and the ability to pay. If you own the gas station, you don't care how high the price of gas is. The "silver bullets" and "quick fixes" in energy aren't going to reduce prices at the pump, but would allow us to take command of our fiscal situation and create an economy that can comfortably weather global oil price spikes. And who wouldn't want that?
The president knows that the Americans struggling to fill their gas tanks will make it difficult for him to keep his job. He's trying to sell us on the idea that there's nothing he or any other politician can do to fix it. But a president interested in leaving behind a strong, successful economy, able to roll with the punches would know that there are viable options on the table, and would do everything he could to get us there.
About Douglas Holtz-Eakin President of the American Action Forum
Daniel Simmons Director of State Affairs at the Institute for Energy Research
Christopher Prandoni Federal Affairs Manager of Americans for Tax Reform
Nicolas Loris Policy Analyst in the Roe Institute for Economic Policy Studies at the Heritage Foundation