Filed under: Products and services, Middle East, Politics, Presidential elections, Commodities, Oil
Republicans and my colleague Aaron Katsman are trying to blame Democrat Barack Obama for rising gas prices. This is election-year politics at its worst.
For one thing, as the Washington Post and other independent observers note, drilling for more oil will do tiny to alleviate the pain U.S. drivers are feeling at the pump. The available supplies are probably not going to make much of a dent in our never-ending thirst for the black gold. Remember, the oil may not be as simple to get or cheap to process.
“Drilling off the coasts would increase U.S. oil production but have no short-term impact on gas prices,” the Post states. “While some analysts disagree, an Energy Department report last year said production wouldn’t start until 2017 and have no ’significant’ effect on prices or supplies until 2030.”
An even more ridiculous idea floated by Republican John McCain is the so-called gas tax holiday, which has been roundly denounced by economists and Obama as a perilous economic gimmick. Experts estimate that it would save the average consumer a whopping $30.
There’s plenty of blame to go around for high gas prices.
Oil markets are spooked by the war in Iraq and a potential war with Iran. Remember how Iraq’s oil was supposed to pay the costs of our military? It has not happened yet. We also haven’t built a new refinery in the U.S. in decades. Speculators are bolstering prices though not to the extent some politicians suggest.
Corporate Average Fuel Economy (CAFE) standards are also a joke. “It was only last December that Congress approved new mileage standards, the first in 32 years,” wrote Joseph Wheelan in the Atlanta Journal-Constitution. “If they stand, the present fleet standard of 27.5 mpg will rise to 35 mpg — but not until 2020.”
The problem is that we want more gasoline than the oil companies can deliver. The problem is that simple and that complicated.
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