Memo to Voters: None of the Candidates Will Lower Your Gas Prices;...

Memo to Voters: None of the Candidates Will Lower Your Gas Prices; A Glance At Clinton’s “Plan”


One of the oddities of current elective politics is not who the media covers, or in what tone they cover them, but rather the insipid approach to issues most people find important. For instance, gas prices. Andrew Leonard wrote about gas prices and the presidential election at Salon earlier this week. To his credit, he states the obvious: Presidents cannot lower gas prices.

But Leonard’s piece is an exception. In the explosion of meta analysis of presidential politics, it’s become more chic to talk about what voters are voting for than to write about the reality on the ground. The role of the press and commentators has somehow transformed from what Thomas Jefferson called ” the best instrument for enlightening the mind of man” into a virtual Oracle at Delphi, working only on predictive functions rather than analytical ones. For instance, today Hillary Clinton is actually holding a campaign event at a Pittsburgh gas station. From her press release (which we will post shortly):

Hillary Clinton will visit a gas station in Pittsburgh to discuss her plan to offer relief from skyrocketing gas prices that are hurting the pocketbooks of families in Pennsylvania and across the country. At the Curran Gulf Gas Station, Hillary will be joined by the owner, Jay Curran, gas station employees, and Janice Hodge, a local resident who has been forced to cut back on other household expenses due to the high cost of gas.

“I think it’s time we kicked the oil men out of the White House. Unfortunately, despite a lot of talk about clean energy, Senator Obama voted for Dick Cheney’s budget-busting tax breaks for big oil. And Senator McCain opposes eliminating them,” said Clinton.“I will provide solutions to offer relief from record gas prices, end our addiction to foreign oil, protect the planet, and create millions of new jobs.”

This is all complete nonsense. And it would be nonsense had Barack Obama or John McCain said any of it as well.

First, her entire plan for lower gas prices is a long term plan. There is little if anything a President can do in the next 8 years to lower gas prices. (As Leonard mentions, one possibility is releasing the Strategic Oil Reserves, but that’s just a terrible idea; first, the price lowering may not be noticeable, and second, taxpayers would just have to spend money to buy enough oil to fill up the reserves again after they were released. What’s the point of that, exactly?). Now, some of the ideas in the long term plan may be good ones (or may be bad ones, depending on your politics) but absolutely none of them will have any substantial impact on gas prices in the next decade barring some major technological breakthrough.

Moreover, the charge about Cheney and Bush being oilmen and thereby manufacturing high gas prices is the biggest canard out there (That no one ever tries to refute for some reason). First, note the logical inconsistency with what I wrote right up top: if higher gas prices causes a party to lose elections, why in the world would Bush and Cheney want higher gas prices? The logic just doesn’t follow.

Furthermore, the language about tax breaks for big oil has absolutely nothing to do with big oil. It cannot logically even be intended to be. Anyone who has taken a basic economics course knows that raising taxes on a provider will not likely lead that provider to lower prices. The mere concept is absurd. It’s rather an attempt to connect emotionally with the audience – “they are screwing you, well I will screw them” sort of thing. Unfortunately, no company is going to lower prices for fear of rescission of any of these tax breaks. Nor does Clinton even claim that to be so.

The actual reason for higher gas prices is twofold: high costs for both crude oil and refining costs. (Clinton actually mentionedthe emergence during the past decade of two other major consumers of gasoline, India and China. (And no, Carl Levin is not any more than marginally right). Katrina revealed the problem with refineries, as the damage that some took in the storm was a significant reason for subsequent higher prices. Recent news indicates very complicated problems with oil production:

Energy experts cited numerous underlying causes for the rise in energy prices, which have persisted despite a weakening American economy. American demand for gasoline has slipped about 50,000 barrels a day (out of total daily consumption of more than 20 million barrels) so far this year because of the slowing economy, but consumption in China, in India and in the oil-producing countries themselves continues to rise. Traders are also concerned about possible production cuts by the Organization of the Petroleum Exporting Countries.

World supplies have been trimmed by substantial cutbacks in production in Iraq and Nigeria in recent weeks. Nigeria alone has lost about 10 percent of its daily production since guerrillas stepped up their sabotage and kidnapping of oil workers in the Niger Delta at the end of last year. Some analysts fear that OPEC could cut production further when it meets next month to counter the prospect that a softening world economy may eventually weaken demand and push prices down.

As Leonard notes, Bush tried to convince OPEC to lower prices to no avail. So it’s hard for me to see how any of the three candidates would have better luck. Do they claim to have incriminating photos of OPEC members doing outrageous sex acts or something? Who knows.

This is not just a short term trend that is going to be magically erased. (For instance, see this BBC article of 2004 and this one of 2008).

But let’s take a look at strategies proposed to lower gas prices…[continued at]

  • ExiledIndependent

    If a President genuinely wanted to impact energy costs, she or he would pour funding into an enegy-independence Manhattan project. Or draw a Kennedy-esque line in the sand stating, “oil-free vehicle fuel by 2018.”

  • gerryf

    …or not launch a war in the most oil-rich and volatile region of the world….

    While I will concede that the president cannot control oil prices, a president can improve the conditions that lead to higher oil…and that does not mean opening up Alaska to oil drilling my conservative friends.

    The price of oil is not a result of an oil shortage–even with China and India ramping up demand there is plenty of oil.

    Gasoline prices are greatly impacted by the investment in oil futures, and lack of refining capacity.

    When we look at oil prices, people point at the greedy oil producers, but the spikes in oil prices we are seeing is a result of oil futures trading. Under normal circumstances, there is a a profit motive in oil futures, so we are paying for that profit, but add to that the incredible instability and anxiety in the world, is it any wonder oil futures are even higher? Not only is the Middle East a powder keg thanks to incompetent foreign policy and unneeded wars, but inept foreign policy in South America and Africa is also driving up costs.

    Also, this administrations policies have intentionally driven down the value of the dollar…as the dollar falls in value, it cannot purchase as much oil as it once could.

    And please, let’s not play the conservative game of “Dang liberals won’t let us make new refineries.” The truth is the oil industry has added the equivalent of one new, state-of-the-art refinery a year, each with a capacity to refine 150,000 to 300,000 barrels per day, by EXPANDING oil refineries. The oil industry has not even tried to build new refineries because it is less expensive to expand. In fact, it could expand capacity even more without every breaking ground on a new refinery but has chosen not to because the current situation suits it (hello, record profits).

    I don’t know what a president can do about the last one, but he or she can do something about the first two.