What can Obama do to bring down gas prices?By Zachary Roth
Wed Apr 27, 11:19 am ET
Here's a rundown of what Obama might do to start bringing gas prices back to earth:
Invest more in renewable energy sources. In a radio address Saturday, Obama called this effort "the key to helping families at the pump and reducing our dependence on foreign oil."
End the $4 billion in subsidies for oil companies. "Instead of subsidizing yesterday's energy sources, we need to invest in tomorrow's,"Obama has said.
Root out fraud and manipulation in the oil markets. Obama has said he'll have a Justice Department task force probe whether oil market traders and speculators are "taking advantage of the American people for their own short-term gain."
Boost domestic oil production. "We don't want a repeat of the oil spill that we had in the Gulf last year," Obama said in an interview Tuesday. "But we've got to continue to make sure that U.S. production is strong." That might mean expanding drilling off the coast of Florida, or in Alaska.
Work with automakers to increase fuel economy standards for cars and trucks.
Press oil-producing allies like Saudi Arabia to do their part. We need to "let them know," Obama said, "that it's not going to be good for the if our economy is hobbled because of high oil prices."
Still, none of these approaches looks likely to have an immediate impact when Americans fill up their tanks. Ending oil subsidies and instead boosting investments in renewables may be good long-term policy, but it would take years for consumers to start feeling the benefits of such shifts at the pump. LIkewise, increasing domestic production wouldn't bring prices down any time soon, while raising fuel economy standards is a long-term project requiring a serious buy-in from Congress. And most experts think manipulation of the oil markets account for only a very small part of the recent price spikes, so it's unlikely that cracking down on such practices will have a major impact. As for leaning on Saudi Arabia, the Saudis profit from high prices, so it's far from clear what leverage the United States may have to counter the Saudis' push for market dominance.
All that and nary a word on the one thing that would have the greatest impact on oil prices. How about fixing our monetary policy? Since oil is pegged to the dollar and the dollar continues to lose value maybe there is a connection, hmmmmm? I bet yuan to donuts that George Soros is betting against the dollar and is helping to drive down the currency and thus inflating the price of oil. Of course, the Chinese Yuan being worth $0.15 is what is driving China's economy which makes us competitors for the same limited supply of oil. Unfortunately, they have a government whose only concern is China and because of this they have been going around the world buying up oil from places like Venezuela and Africa ...
Add to the stupid monetary policy the stupid ethanol policy and now you double down on higher food prices.... The ratio of the energy obtained from ethanol/energy expended from corn in the U.S. in its production is between 1.3-1.6. Compare this to Brazil where they make their ethanol from sugar cane which contains far more energy per unit (8.3-10.2) and I'd say we are crazy to try to continue to direct corn from our food supply for such an incidental amount of energy.... But, the ethanol lobby is pretty strong....
And finally we have a no-new-oil-exploration and no-new-oil-leasing policy of our energy department. We are pumping more of our own oil now, but these are on leases granted by the previous administration (as it can take 6-8 years to develop new wells).... So where does that leave us in 6-8 years...?