Gas prices is one of the biggest issues on the minds of Americans across the country. While the economy is improving, the pain at the pump is causing hardship to millions of people in the United States. Republican candidates are on the offensive, blaming President Obama and his energy policies for the rising cost of gas, but the reality just doesn’t line up with the conservative rhetoric.
Whether it’s Mitt Romney, Newt Gingrich or other Republicans, they all have been very vocal about President Obama. The Keystone XL Pipeline has been a major Republican talking point, but the oil being extracted from the pipeline would be tar sands crude oil, the dirtiest oil of its kind. The oil that would be extracted wouldn’t even be used in the U.S, paying no U.S. taxes and sold for a profit to other countries. The Republicans all come to the same conclusion on how they would solve the current energy and gas price problem. The answer doesn’t come as a surprise as it’s the same one we’ve gotten for decades, “drill, baby, drill.” Newt Gingrich has promised $2.50 a gallon gas and Republicans have accused President Obama of not drilling enough in the United States. American reliance on foreign oil has been a problem since President Nixon was in office in the early 1970s. For over four decades, the United States has known about this problem, yet hasn’t done enough about it to affect the perception of the American people.
In 2005, during the middle of the Bush administration, U.S. oil dependence was at 60% and the price of gas was rising. In the summer of 2008, gas prices averaged $4.11 a gallon and Americans were on hard times as the recession was in full effect. As the months followed, the United States was losing $750,000 jobs a month, but gas prices were falling. By the end of the year, gas prices had dropped below $2 a gallon because, with a bad economy, demand dropped significantly. Oil amounts to about half of the cost of gas, and as demand drops the price drops along with it. As the economy has improved, the price of gas has increased.
There are many factors in why gas prices are so high, but President Obama and his policies have very little to do with it. The Wall Street Journal reports that demand is at a 14 year low, while supply is at one of the highest peaks in history. If we follow the normal chain of command of “supply and demand,” gas prices should be falling drastically today, so the answer needs to come from somewhere else.
When thinking about oil, gas and how much the United States consumes and produces, it’s important to look at the numbers. The United States uses around 20% of the world’s oil, but only sits on around 2% of the oil reserves. Even though the U.S. is drilling more today, there is no way it could keep up completely with demand by only drilling inside its borders. Over the last three years since President Obama has taken office, the United States reliance on foreign oil has dropped. In 2010, the U.S. dependence on foreign oil dropped below 50 percent for the first time in over a decade. While the U.S. is producing more of its own oil and relying less on others, gas prices are still high.
Uncertainty in the Middle East is a major factor causing oil prices to rise. A possible war with Iran, uncertainty with Israel, the possible closure of the Strait of Hormuz and other issues in the Middle East has caused oil prices to rise to around $107 a barrel. With uncertainty in the Middle East, Wall Street speculators have been able to drive up the cost of oil, bringing gas prices up with them. The financial markets are still not regulated as much as they need to be, and because of this, gas prices can be dictated by the financial gamblers on Wall Street.
Republicans can blame President Obama all they want, but the facts are the facts and the numbers don’t line up with their line of attack. As gas prices increased in 2008, the Fox News Channel was quick to defend President Bush and his inability to do much about the rising cost of gas. We fast forward to 2012, and they seem to forget their former position and take the Republican party line of bashing President Obama. Who should you blame for rising gas prices? You can point to the Middle East, oil companies or Wall Street, but pointing your finger only at President Obama is just not right.