For the past several weeks, Republican leaders have placed the blame for higher gas prices upon President Obama. To support this assertion, these Republicans have cited President Obama’s rejection of the Keystone XL pipeline and the crippling regulations that have been enacted by the Obama administration. However, our president and his supporters argue that gas prices are rising due to outside influences such as Middle Eastern tension and that, henceforth, President Obama is unable to make much of an impact on gas prices. These are both valid arguments, so who is really to blame for higher gas prices?
In his op-ed in the Wall Street Journal this morning, Republican governor Bobby Jindal lays out a comprehensive rebuke of President Obama’s current energy policy. He argues that President Obama has been obstructing new oil drilling by reducing deep-water drilling permits by nearly 30%, by rejecting the Keystone pipeline, and by enacting stringent gasoline standards. These standards, which typically involve the mixing of regular gasoline and inferior (and more costly) ethanol, are currently being implemented at the state level here in California, and I can assure you that they are extremely costly. Besides Hawaii, California has the highest average gas prices in the entire United States, and the state’s average gas price is fifty-seven cents higher than the national average. Additionally, gas in California costs, on average, a whopping $1.05 more than that of Wyoming, the state with the least costly gas of all. Wyoming, of course, is one of the most conservative states in the United States, with more than 50% of its residents identifying themselves as conservatives. Clearly, government policy makes a big difference in gas prices, even at the state level.
There are certainly foreign influences contributing to rising gas prices here in the United States, but it is simply inaccurate when President Obama and his supporters paint these influences as the exclusive cause for rising gas prices. Mr. Jindal puts it this way (emphasis is mine):
Some estimates suggest that the U.S. could overtake Russia as the world’s top producer of oil and gas by 2020, and we should not be singling out [the oil industry] for tax increases that would inevitably lead to higher prices for American Consumers. Rather than punish[ing] one type of producer in favor of crony capitalism, [America] should adopt a flatter tax code with lower rates and no loopholes that allows different energy types to compete in the marketplace.
Gov. Jindal’s point is twofold. First, there is a wealth of oil here in the United States that is simply being ignored by the Obama administration in their attempt to protect a heavily-subsidized clean energy industry that has been a failure on all fronts. By taking advantage of the energy we have here at home, the US can reduce its dependence upon foreign oil and can provide a massive influx of oil supply into the marketplace, prompting rapid price declines. Secondly, Mr. Jindal advocates for a fairer tax code that allows oil companies to compete on the same playing field as solar, wind, and other heavily-supported energy industries. By allowing the free market to decide prices and products, such a tax code would force clean energy companies to create more advanced, innovative products in order to stay afloat and to stay competitive. Meanwhile, oil and gas companies would have to find more efficient ways to refine and extract oil and gas to meet public demand for lower prices and better fuel.