Gas prices rise: Is Obama to blame?
Gas prices are 14 percent higher than a year ago, though US demand has risen only 0.7 percent. So what – or who – is driving up prices? The Heritage Foundation points a finger at Obama's environmental policies.
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The American Petroleum Institute thinks the rising price – which closed Friday just under $90 per barrel – is driven by higher demand, particularly in such countries as China and India. Worldwide, demand for crude oil is up 2.2 million barrels per day over this time last year, including an increase of 350,000 barrels per day in the US. Total world demand hit 87.7 million barrels per day in 2010. The US Department of Energy's Energy Information Administration estimates that demand will grow another 1.5 million barrels per day in 2011.Skip to next paragraph
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"The record demand tells me this is mostly about market fundamentals,” says John Felmy, chief economist at the API in Washington, but he thinks Washington could ease some of the pressures. “If we could produce more oil here, it would help,” he says. “It would also provide jobs and revenue for the government.”
The Heritage Foundation proposed three specific policy changes to help with gasoline prices.
First, it recommends drilling for more oil, even though it admits “drill, baby, drill” is not a panacea. In a policy paper, David Kreutzer, an energy expert at the Foundation, wrote, “More petroleum on the world market helps to hold prices in check.”
Second, Mr. Kreutzer thinks the Obama administration’s tilt towards cleaner fuel standards is driving opposition to a petroleum pipeline from Canada’s tar sands that would provide the US more than 1 million barrels of petroleum each day – more than it imports from either Saudi Arabia or Venezuela, two of America's largest suppliers.
Lastly, Kreutzer would put a leash on the EPA, whose regulations, he claims, drive up the costs of producing a gallon of gasoline.
Many of these arguments resonate with Republicans, now the majority in the House.
“This is obviously something we are keeping a close eye on,” says Brendan Buck, spokesman for John Boehner, House Majority Leader. “We don’t agree with some of the barriers President Obama has up to increasing domestic production.”
On Thursday, Robert Gibbs, the President’s press secretary, said energy independence and the security of the planet “are and will continue to be issues that we’re going to have to deal with.”
Mr. Gibbs added, “And, again, more and more and more of our oil comes from – or our energy comes from places that are not here. That puts us at a disadvantage.”
Gibbs noted that President Obama had taken some steps to change fuel economy standards to lessen usage of foreign oil. But, he concluded, "I think there’s no doubt that we have a lot more to do.”
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