Posted on 04/26/2011 5:43:13 AM PDT by Libloather
Battered by gas prices, White House starts attacks on oil companies
By Ian Swanson - 04/23/11 10:45 AM ET
The White House has joined congressional Democrats in targeting oil companies with criticism for nearly $4 per gallon gas.
President Obama lashed out at oil companies — and the tax breaks they get from the government — for a second consecutive day on Thursday and again in Saturday's address.
“Four billion dollars of your money are going to these companies at a time when they’re making record profits and you’re paying near record prices at the pump,” the president said at a Nevada town hall. “It has to stop.”
Obama also announced a Justice Department task force that will probe whether speculators and traders are to blame for the high prices. A spokesman for House Speaker John Boehner (R-Ohio) on Friday criticized the effort as an attempt to deflect attention from White House and Democratic opposition to increased drilling in the United States.
Going after oil companies is smart politics for Obama, according to polls and Democratic strategists.
Only 11 percent of those surveyed in a McClatchy-Marist poll this week said Obama and Democrats are to blame for high gas prices. Thirty-six percent of U.S. residents blamed turmoil in the Middle East for the high prices, while 34 percent say U.S. oil companies are to blame.
Seven percent said congressional Republicans were at fault.
“I do think people aren’t really sympathetic to the oil companies,” said Democratic strategist Peter Fenn, who contributes to The Hill’s Pundits Blog.
But he also said “there’s no question” the high prices are hurting the president, and that there’s not a lot the White House can do to lower prices.
High prices are being triggered in part by the perception that turmoil in the Middle East and higher demand in the summer driving season should drive up prices, according to Sander Cohan, a fuels analyst at Energy Security Analysis. Petroleum supplies in the U.S. are actually at seasonal levels, he said.
While the war in Libya is pulling a few million barrels per day from markets, Cohan emphasized that perceptions of higher demand are having an even bigger effect on price.
Members of Congress are hearing complaints from their constituents, which has led to tensions between the White House and Democrats in the House and Senate.
Obama has come under pressure from members of his party to do more to reduce gas prices. Sen. Charles Schumer (D-N.Y.) has called on the president to release fuel from the strategic oil reserve, which he said would provide relief to drivers at the pump and prevent the economy from slipping back into a decline.
The administration has been cool to opening the reserve, though officials have described it as an idea under consideration.
Obama said Saturday there are no easy answers for lowering gas prices, which are hovering around $4 a gallon, and criticized politicians who are pushing plans to immediately reduce the price of gas.
But by hitting the oil companies over subsidies and sending the Justice Department on an investigation, Obama can try to mend fences with his allies.
Sens. Carl Levin (D-Mich.) and Jack Reed (D-R.I.) welcomed Obama’s announcement of the Justice task force on Thursday, and said the White House should continue efforts to stop speculation from causing prices to spike.
Obama has been battered by polls showing voter angst with the economy and worry over the president’s leadership. At least some of that anxiety is based on rising gas prices, which have steadily increased over the past two months.
According to AAA's tracking, the national average price for a gallon of regular gas is $3.86, which is 4 cents per gallon more than a week ago and nearly $1 more than a year ago.
Even though the McClatchy-Marist poll shows voters blaming oil companies, political insiders in both parties believe the president will get the blame, according to a Thursday Insiders Poll from National Journal.
Obama himself on Thursday suggested gas prices as one of his problems, telling a crowd of supporters that included actor Tom Hanks and film director Steven Spielberg that “my poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people."
The trouble with gas prices is a bit of a frustration to a White House that otherwise can tout the beginnings of an economic recovery.
Private payrolls added more than 200,000 jobs last month, and the unemployment rate has dropped a full percentage point in a matter of months, to 8.8 percent.
Markets, which were closed Friday, are up for the year, and posted solid gains last week after an initial scare Monday when the Standard & Poor's credit rating agency lowered its outlook on U.S. debt.
Yet 70 percent of those answering a New York Times/CBS poll released Thursday said they think the country is headed in the wrong direction. Thirty-nine percent of those polled said the economy was getting worse, up from 28 percent who thought the economy was getting worse in October.
Interesting this move, which I think is a big mistake. All the Republicans and Fox News have to do is play the clips of Salazaar saying he would not drill if gas were 10.00 a gallon. How long before the public figures out the strategy on anything that people don't like is basically to appoint a commission, blame someone else, then blame Bush, then do nothing. Hilarious.
Take away the subsidies and the price of gasoline will go UP.
Is that too difficult a concept for these liars.
You beat me to it. Either the Dims are really that stupid, or they believe the American people are.
Or both.
Obama and the gov’t is not the solution to high gas prices, they are the problem ! Drill Here and Drill Now !
Is that too difficult a concept for these liars.
No, that's what they want. Never lose sight of that fact. They want the price of gas, and oil, to be as high as possible.
Carley: “Take away the subsidies and
the price of gasoline will go UP.
Is that too difficult a concept for these liars.”
Actually, THEY KNOW.
Chu and Obama WANT $10 to $20 a gal gasoline.
Heck, it doesn’t effect THEM.
Excellent! I am trying to find a link to Salazar’s exact quote on that.
I will post it if I can find it.
It is the same group who think you can tax the rich with an income tax.
We are caught in the clutches of an absolutely insane government.
The problem...Two many of BOTH are truly stupid. Liberals idea..make GAS so damn expensive that no one will drive, let’s say, to CAPE COD for summer vacation. That will really help the economy of the tourist areas. Help ease traffic on the Cape, cut down on air pollution, help Mother Earth, cut the toll of little turtles killed by cars crossing the road.
The benefits are virtually endless. And this would hold true across the entire country.
Lord Forbid!!!
The voters have proven their stupidity.
It's not that the American people are stupid as much as they are lazy. They'd rather sit back & let Katie Couric et al TELL them how to think & feel.
These idiots are going to do something about the prices alright. And as usual they will screw it up.
Get ready for gas lines.
At this point, we don't have a shortage of gas. I doubt gas lines will be an issue. In fact, prices could come down somewhat what with less of a market from consumers not driving. But they won't come down much, and people staying off the highways will impact other areas of the economy.
Oil Companies + Rivers of Cash + Citizens United decision should be able to put together a PR campaign to assure Obama goes back to Chicago in 2012.
“Is that too difficult a concept for these liars.
It is the same group who think you can tax the rich with an income tax.”
That my friend, is too funny. I love it.
Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. That's $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced).
Even with high gas prices in 2006, producing a gallon of ethanol cost 38¢ more than making gasoline with the same energy, so ethanol did need part of that subsidy. But what about the other $1.12. Not needed!
So all of that became, $5.4 billion windfall of profits paid to real farmers, corporate farmers, and ethanol makers like multinational ADM. Why is it the farm states put up with this?!
Where did those subsidies come from:
1. 51¢ per gallon federal blenders credit for $2.5 billion = your tax dollars.
2. $0.9 billion in corn subsidies for ethanol corn = your tax dollars.
3. $3.6 billion extra paid at the pump.
That's quite a bit when you figure it only made us 1.1% more energy independent and only reduced US greenhouse gases by 1/19 of 1%.
Five years ago, a US General Accounting Office report showed that ethanol had received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period.
While true, the oil industry produced 1068 times more energy so the subsidy rate per unit energy was 54 times higher for ethanol. That's like ethanol gets 54¢ and oil gets 1¢.
Likewise while impossible to tell how many people the Ethanol Business employs, it is nowhere near the est 330,000 people who work in the eeeeeevil oil industry.
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