In 2008, Department of Energy (DOE) Secretary, Dr. Steven Chu said that American energy policy should be calibrated to drive the cost of gasoline to the same level as Europe in order to produce more demand for alternative energy production. Chu told The Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”
When questioned by Rep. Alan Nunnelee (R-MS), Chu was asked: “But is the overall goal to get our price of gasoline down? “No,” responded Chu. The overall goal is to decrease our dependency on oil, to build and strengthen our economy. We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.” We’re still waiting…
Well, the President Barack Hussein Obama administration may have found a way to achieve Secretary Chu’s goal (which Chu retracted on March 13, 2012).
Heather Zichal, deputy assistant to Obama for energy and climate change, when asked if eliminating oil company subsidies would do anything to lower the price of gas, or if it was about fairness, said, “From our perspective, it’s a fairness issue. At a time when we’re making difficult decisions about the budget and where to make investments and where to cut, the fact that oil and gas companies are making record profits and at the same time getting $4 billion in subsidies annually, those subsidies should be repealed.”
The definition of “subsidy” has been discussed here ad nauseam. Let’s see: are subsidies received by oil and gas companies available to any and all companies? Yes, yes, they are! Are subsidies being given by DOE to green/clean/alternative energy companies (that keep filing for bankruptcy) available to any and all companies? No, no, they are not.
Anyway, in an effort to be “fair,” Obama wants to close tax loopholes and end subsidies for oil and gas companies. And just how does Obama (and his team of economic advisors) think that move will lower the price of gasoline? Does Obama have Chu’s 2008 goal in mind? Does Obama really believe that higher tax costs will not be passed on to consumers? And how does Obama consider this to be a fairness issue? And specifically to whom is he being fair?
A Washington Post/ABC News poll released last Monday said that 65 percent of US citizens disapprove of how Obama is handling the price of gasoline, while 26 percent approve. In truth, the president has little effect on gasoline price, but the public perception is that he can have a major effect because the MSM hounded George Walker Bush to do something? Remember? What goes around, comes around.
But (and there is always a but) there just may be something Obama can do about gasoline prices. The cited source discusses the role of speculators. Neither the Democrats or Obama or his economic advisors appear to have a clue how markets work. Obama and many politicians seem unable to understand that what speculators do is smooth out wild swings in prices. Speculators make profits by buying oil when the price is low and selling it when it is high. Speculators are taking a real risk with their own money. Few Democrats are going to shed tears over the money if speculators lose money. Obama and Democrats claim that there is nothing that can be done immediately to reduce oil prices, saying that if drilling in the US started today, it would take years before we would actually see it. But lower future prices do lower current prices. Obama blames speculators for driving gasoline prices higher and straining American consumers, saying there was enough oil in world markets to meet demand. It seems as if nothing is ever his fault.
Let’s examine some of Obama’s policies concerning domestic energy and its production:
- In January, 2012, Obama killed the Keystone XL pipeline, then last week he personally called Democrats to stop them from voting for the Keystone XL pipeline, while promoting subsidies for alternative energy despite several failed companies.
- He has slowed the process for new drilling permits.
- He, his administration, and Democrats have backed cap and trade.
- He has stated, “Anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about, or they’re not telling you the truth – one or the other.”
- He said, “Under my administration, America is producing more oil today than at any time in the last eight years.” Is he trying to take credit for something with which he had nothing to do? I ask commenters to read this source, then decide.
So, to be “fair,” all gasoline consumers will have to bear the brunt of Obama’s lunacy, er, to achieve Chu’s goal, and to further Obama’s policies.