By Teresa Welsh |
Blaming President Obama for high gas prices is like blaming LeBron James for the Miami Heat's loss in last year's NBA finals. There are too many factors at play to place blame on a single individual. But just like LeBron, President Obama has come up short.
Most of what's happening is out of the president's control. That's because the single biggest factor driving the gas prices is the price of oil. The Energy Information Administration reports that, in January, crude oil prices accounted for 76 percent of the price of a gallon of gas.
Crude is sold in the global market—and global demand is up. And while U.S. demand has fallen due to a weak economy and a warm winter, China and India are buying crude at a blistering clip. Asia surpassed North America as the world's largest petroleum-consuming continent in 2008. And that consumption will only increase as China and India's economic growth continues to outpace ours. That puts upward pressure on crude prices, which ultimately get passed through at the pump.
The Federal Reserve also deserves its share of blame. Oil trades in U.S. dollars and the Fed's easy money policy has weakened the value of the dollar. It now takes more dollars to buy the same amount of oil in the U.S.
With respect to oil and gas production, President Obama ignores the bad administrative decisions and takes credit where credit's not due. He touts that oil production is the highest it's been in eight years.
Increased oil and gas production in the U.S. is a great development, but this is largely a result of increased production on private lands in North Dakota, Texas, and Alaska. On federal lands and offshore, the story is much grimmer. Last year, oil production dropped 14 percent on federal lands and waters, including a 17 percent dip in the Gulf of Mexico.
Production from federal lands and offshore could have increased fuel supply, exerting downward pressure on oil prices. Instead, executive decisions by this administration have severely restricted producers' access to these areas and slowed the permitting process to an anemic crawl.
It would be unfair and disingenuous to lay all blame for high gasoline prices at the president's doorstep. But by restricting access to exploration and production, Mr. Obama's policies have certainly helped drive gas prices to artificially high levels.
About Nicolas Loris Policy Analyst in the Roe Institute for Economic Policy Studies at the Heritage Foundation
Daniel Simmons Director of State Affairs at the Institute for Energy Research
Douglas Holtz-Eakin President of the American Action Forum
Christopher Prandoni Federal Affairs Manager of Americans for Tax Reform