HIGH GASOLINE PRICES

INCREASED DRILLING

Over the past several weeks, the American people have experience huge increases in gasoline prices.  Republican conservatives, including their presidential candidates, blame the gasoline increases on President Obama supposedly because of his so-called “anti-drilling policies.”  The fact is that oil prices soared despite both record drilling and the highest domestic oil production levels in almost a decade.  The U. S. Energy Information Administration continues to report that more drilling do not have any significant impact on oil prices.  Yet, under the Obama presidency, U. S. oil drilling is up nearly 60% in the past year and at its highest total since 1987.  The above chart illustrates this increase in oil production.

Republicans have consistently been lying to the American people by telling them, among other things, that President Obama is over regulating the energy and their presidential candidates want to abolish EPA.  However, according to the Bureau of Labor and Statistics and the Federal Reserve of St. Louis, employment in the oil and gas community has reached a 20-year high with 186,000 employees, the highest since 1992.  Even the coal industry has experienced a significant employment increase in 2011, with over 87,000 employees not seen since 1998.  In 2009, the Obama administration approved 4,487 oil drilling permits to drill on federal land; in 2010 there were 4,090 permits issued; and by the end of 2011, 4,244 permits issued, equaling President’s Bush’s oil record in his first term.

Fox News and the right-wing radical part of the Republican Party has engaged in an orchestrated effort to blame the Obama administration for high gasoline prices (a claimed that has consistently been debunked.)  However, during the summer of 2008 when gasoline prices hit an all time high of $4.11 per gallon, Fox said that, “no President has the power to increase or to lower gas prices.” Fox also said that, “expanding domestic oil drilling will not significantly lower prices, and the only way to reduce our vulnerability to gas price spikes is to use less oil.”

Fox News commentator Bill O’Reilly also blames President Obama for his energy policy and increased gasoline prices; however, O’Reilly had a completely different position during the Bush administration and O’Reilly is now upset with Media Matters for calling him out. Media Matters used a verbatim clip from Bill O’Reilly to illustrate his claim that politicians (without regard to party) have very little control over gas prices, but supply and speculation are much larger factors.  O’Reilly does not deny what he said during a Republican administration but now claims that it is entirely Obama’s fault that gas prices have increased.  O’Reilly says that Media Matters was lying (although they quoted O’Reilly verbatim).  Here is why O’Reilly is upset with Media Matters and you be the judge:

O’REILLY: “As you know, I’ve been very critical of the oil companies jacking up gas prices when there is plenty of supply available in the USA. I’ve criticized President Obama for doing nothing about it when he could call the oil chieftains and get behind legislation to limit oil speculation.  Those would be the same oil chieftains that spoke to the President through their puppet, Petroleum Institute Jack Gerard, telling him to “approve Keystone XL pipeline or else?”

O’REILLY: Enter Media Matters, who calls me a hypocrite because they say I didn’t hammer President Bush when gas prices rose during his tenure.  

O’REILLY: When you hear a politician say he or she will bring down oil prices, understand its complete BS. If Americans want lower gas prices, cut back.

O’REILLY: Now Media Matters posted that clip nine days ago, but they dishonestly edited it. Here’s the full clip:

O’REILLY: The Republican Party pretty much lets big oil do whatever it wants and refuses to rein in corrupt speculators who drive up the price of oil. So the next time you hear a politician say he or she will bring down oil prices, understand it’s complete BS. If Americans want lower gas prices, cut back.

Unless it’s in O’Reilly’s mind, there are no contradictions in the Media Matters reporting and it continues to support the right-wing radical lies against this President.  In addition, O’Reilly may not have realized it, but his comments were a direct slam against Newt Gingrich who said that if elected President, he would ‘bring gas down to $2.50 a gallon.”  However, I wouldn’t place too much stock in Gingrich’s comments; after all, he wants to build a colony on the moon.

Although speculation contributes to high gasoline prices, the single biggest factor in the price of gasoline is the cost of crude oil. In recent years, the world’s appetite for gasoline and diesel fuel grew so quickly that suppliers of these fuels had a difficult time keeping up with demand.  This demand growth is a key reason why prices of both crude oil and gasoline reached record levels in mid-2008. By the fall of 2008, crude oil prices began to fall due to the weakening economy and collapse of global petroleum demand. These factors helped gasoline prices to drop below $2 per gallon of Regular gasoline in late 2008 and early 2009. The gradual improvement in the U.S. and world economies in 2010 and the political events in the Middle East and North Africa in early 2011, the source of about one third of world oil production, contributed to the increases in crude oil and gasoline prices in 2010 and 2011.  History informs us that gasoline prices rise and fall depending on a variety of factors usually not in the control of Republican or Democratic administrations. Let’s hope by summer they fall again.

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