Oil Goes Up; Obama Goes Down
Published on TheHill.com on February 28, 2012
I hate to quote the Rev. Jeremiah Wright, but the chickens have come home to roost for President Obama as higher oil and gasoline prices swamp his reelection bid.
Count the chickens:
•Obama refused, until two months ago, to impose tough sanctions on Iran, increasing the likelihood of an Israeli attack. Already, speculation that such a strike might be in the offing is driving up oil prices.
•His anti-Israeli policies have diminished that nation’s confidence that it can rely on the United States to handle Iranian nuclear ambitions.
•The president’s veto of the Keystone pipeline and his refusal to drill in Alaska’s Arctic National Wildlife Refuge makes it crystal-clear to voters that there will be no relief coming from the north.
•His stubborn refusal to issue deep-water drilling permits despite having officially lifted the moratorium he imposed after the BP spill is costing us hundreds of thousands of daily barrels in domestic production.
•His relentless crusade against oil company tax privileges undermines our ability to explore, drill and produce oil.
As gas prices rise, President Obama owns them. His public stands against oil drilling are coming back to haunt him. After his approval ratings peaked at 50 percent, Rasmussen and Gallup both have him back in the mid-40s.
Obama proudly points to the fact that we are producing more oil domestically than we have for some years. True. But that’s because Bush issued permits for a massive expansion in offshore drilling and exploration on federal lands. And it’s because private and state land is being used for horizontal drilling and fracking despite the increasing objections of Obama’s EPA.
Obama says that more domestic drilling is not the answer. But it is. Even with his stubborn refusal to issue deep-water drilling permits, American oil production is slated to rise by 2 million barrels of oil per day — an increase of about 25 percent — over the next two years. Canadian production will rise by 1 million barrels, assuming we can get it to the United States over Obama’s objections.
Globally, a 3 million-barrel increase in oil production would be huge — about a 4 percent increase in global supply. Those 3 million new North American barrels will make it possible for the United States to cut off all imports from the nations that hate us: Saudi Arabia, Venezuela, Ecuador, Russia, Algeria.
By 2020, we can be the new Saudi Arabia — providing the world’s oil needs — if only Obama would get out of the way.
Peter Morici, professor at the Smith School of Business, University of Maryland School, and former chief economist at the U.S. International Trade Commission, points out that domestic oil production lowers prices in the United States. He points out, for example, that Texas oil is selling for $17 less than oil from the North Sea off the United Kingdom. He says “this indicates the U.S. market is becoming somewhat separate and less wholly determined by global conditions; hence, more domestic production and increased access to Canadian oil would lower U.S. oil and prices — more drilling in the Gulf and elsewhere in North America, and the Keystone pipeline, would significantly affect gas prices and employment.”
Nor has Obama hidden his opposition to oil production under a bushel. He has been front and center in calling for movement away from fossil fuels and has made clear that he is more worried about climate change than keeping prices down. Now Americans see that his policies are backfiring and it is costing them at the pump.
For Obama, the risks are even greater. The surge in oil prices that will follow speculation about an Israeli attack on Iran — and the huge increase that will take place if there is an actual attack — will derail his so-called recovery. And everyone will know where to place the blame.
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