When President Obama took office, the national average gasoline price was $1.83 per gallon according to the Energy Information Administration. As of this writing, the national average gasoline price is $3.39 per gallon. There are many factors that determine the price of gasoline, not the least of which is turmoil in the Middle East. The price depends on supply and demand and upon the expectations of supply and demand.
I don’t know if the Obama administration is simply clueless on energy, or if there is a determined ideological effort to cripple fossil fuel supplies in order to promote renewable energy, but the effect of administration policy is to discourage and hinder domestic production of fossil fuels.
In September, 2008, soon to be Energy Secretary Steven Chu told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Gas prices in Europe averaged about $8 a gallon at the time.
Contrary to administration rhetoric that the U.S. should become more energy independent, administration policy seems to be directed to do all it can to stifle domestic production.
Following the Deepwater Horizon accident in the Gulf of Mexico, the administration imposed a drilling moratorium. That moratorium was lifted last October, but in fact still remains in force. The Interior Department has approved just one drilling application although more than 100 are pending. A federal judge ordered that the de facto moratorium be lifted but the administration has ignored that order. In fact, in early February, the federal judge held the Interior Department in contemp of court for dismissively ignoring his ruling to cease the drilling moratorium which the judge had previously struck down as “arbitrary and capricious.” Ironically, the de facto moratorium of Gulf drilling will deprive the federal government of $1.35 billion in royalties this year.
According to the Heritage Foundation, “Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.”
The U.S. has abundant resources of oil and natural gas in shale deposits. According to the U.S. Geological Survey the U.S. holds more than half of the world’s oil shale resources. The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Colorado, Utah and Wyoming. The USGS’s most recent estimates (April, 2009) show the region may hold more than 1.5 trillion barrels of oil – six times Saudi Arabia’s proven resources, and enough to provide the United States with energy for the next 200 years. But Obama’s Interior Department is reversing Bush-era policy by delaying leases saying they need to take a “fresh look” at the situation.
The EPA has added costly new regulations to refineries over concern with global warming. The EPA is also denying approval of the Keystone pipeline which would increase the amount of oil the U.S. receives from Canada by over a million barrels per day.
If all this were not enough, the Interior Department has instituted a new “wild lands” policy that will bypass Congress in establishment of wilderness areas which will further delay and restrict access to our mineral resources.
The next time you fill your car with gasoline, don’t blame the oil companies for the high prices, the fault lies squarely with Obama’s energy policy.