President Obama went on the road Thursday to defend himself against a tide of Republican accusations that he is causing gasoline prices to go up, accusing them of “licking their chops” and playing politics with bad news.
With gas prices returning to the political forefront, Obama took on Republicans who argue his policies have stifled domestic oil-and-gas production and contribute to rising gasoline prices that analysts say could reach $4 this year. He said that “there are no short-term silver bullets” to the gas-price issue and that U.S. production has little influence on the crude-oil prices, the major determinant of gas prices.
“That’s because oil is bought and sold in a world market,” Obama told a supportive crowd at the University of Miami. “And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East – this time in Iran. When uncertainty increases, speculative trading on Wall Street can drive up prices even more. So there are short-term factors at work here.”
Obama insisted the country needs an “all-of-the-above” energy strategy — a phrase often touted by the GOP — involving a combination of “safe, responsible” oil-and-gas production; other forms of energy such as nuclear and renewables; and boosts in energy efficiency.
He has pushed such a platform since his State of the Union address, where he said his administration would:
- Open most of its offshore resources in the Gulf of Mexico and the Arctic Ocean;
- Approve 10 gigawatts of renewable energy on federal lands;
- Push for extension of clean-energy tax credits and a low-carbon energy mandate.
Obama today also pointed to his administration’s proposed rules that would roughly double passenger-vehicle mileage to 54.5 miles per gallon by model year 2025, saying they would cut oil use.
The American Petroleum Institute, the leading oil-and-gas lobbying group, says global oil-market forces are the main factor behind gas-price hikes. Republican politicians have been more likely to credit Obama with rising gas prices.
“American families and small businesses are once again suffering from rapidly rising gasoline prices, and the Obama administration’s policies are making it worse,” Rep. Doc Hastings, R-Wash., chairman of the House Natural Resources Committee, said in an emailed statement.
But API has called Obama’s “all of the above” rhetoric hypocritical, saying he has restricted development of offshore and federal-land resources with regulations and processes that reduce leasing and permit approvals. The group also has pushed for more drilling offshore and on federal lands, saying the resulting supply increase could help reduce upward pressure on crude prices for the long haul. API today sent out a news statement chiding Obama’s “Jekyll and Hyde” approach to energy policy.
Republicans and industry groups also point to Obama’s denial of the Keystone XL pipeline, which they say would have carried oil to Gulf Coast refineries from Canada, a friendly neighbor, cutting U.S. reliance on Middle East oil.
“An ‘all-of-the-above’ energy strategy starts with signing off on the Keystone XL pipeline and the tens of thousands of American jobs that come with it,” Sen. John Cornyn, R-Texas, said in an emailed statement.
Environmentalist opponents contend the pipeline wouldn’t alter the level of imports from Canada.
The House recently passed Republican-backed legislation that would lease new offshore areas beyond the Gulf and Arctic, open a small part of the Arctic National Wildlife Refuge for drilling and approve Keystone XL. Hastings has called such a policy an “action plan” to boost energy security, create jobs and cut gas prices.
Obama has long argued that GOP political maneuvering — including a decision deadline in the December payroll-tax law — put an “arbitrary” and “rushed” timeline on the administration and he has said that TransCanada Corp. could apply again.
Today, Obama also called such proposals focused entirely on oil-and-gas drilling “a bumper sticker” and “a strategy to get politicians through an election.” He said in the long term the U.S. can drill it wants but that new production will get drowned out on the global market by rising demand, especially in emerging nations like India and China, where car use has surged.
“It means that anyone who tells you we can drill our way out of this problem doesn’t know what they’re talking about, or they aren’t telling you the truth,” Obama said in defending the need for a “balanced” approach.
Rejecting notions his policies have hurt oil-and-gas production, he said domestic output had risen under his administration and net imports have fallen — though GOP lawmakers and industry don’t agree that his policies are to credit.
Industry has focused much of its recent criticism of Obama on his proposal to roll back oil-and-gas tax breaks worth about $40 billion over 10 years as part of a business-tax strategy that lowers the corporate rate but broadens the base.
API President Jack Gerard said Obama’s fiscal 2013 budget actually would impose $85 billion of tax increases on an industry that has helped boost the economic recovery in places such as North Dakota, where unemployment is around 3 percent.
“It will stifle job creation, drive up imports, and our trade deficit, and increase the volatility of gasoline markets,” Gerard said.
Obama defended the proposal, saying to applause: “It’s time to end taxpayer giveaways to an industry that has never been more profitable, double down on clean-energy industries that have never been more promising — that’s what we need to do.”
Courtney Abrams, clean-energy advocate with Environment America, an environmental group, praised Obama’s tax plan, saying analyses show that “subsidies to fossil fuels have traditionally dwarfed those to renewable energy.”
“The Obama administration’s newly released plan for tax reform takes bold steps towards leveling the playing field for clean, renewable energy,” she said in an emailed statement.
Gerard said the “subsidies” aren’t subsidies at all, rather standard cost-recovery mechanisms all sorts of businesses rely on.
This story was last updated at 5:17 p.m.