Why Obama can't control gas prices

Markets are unpredictable, impacted by greed, speculation, fear, global events, and economics – almost none of which Obama can easily impact, even if he tries to nudge actors to put curbs on speculation.

Second, even if Obama could impact some of these factors, all of them combine to shape the actions of oil traders in ways that nobody can easily guess. In fact, some studies show that professional money managers are no better than monkeys in predicting such markets.

Third, Obama could affect longer-term oil prices by spearheading a serious comprehensive energy policy, and working with China and India to do the same. But traders probably won’t sell oil futures now for a policy that will take effect in three, five, or 10 years, unless perhaps it is constructed and marketed exceedingly well.

Fourth, short-term measures like the ones Republicans are stressing won’t be enough to alter prices. For example, greater drilling in Alaska represents a drop in the global oil bucket. Moving America’s truck fleet to natural gas – a smart move – could impact oil prices, if that move were truly comprehensive and went into effect sooner rather than later. But those things are doubtful.

Fifth, American presidents are not all powerful as they are sometimes viewed or portrayed to be. Obama, like any president, has to work with others and faces many obstacles, which check his influence. For instance, agreeing on a comprehensive energy policy is no easy task, much less getting China, India, and others to join.

America should certainly launch a major energy policy that includes moving to hybrid and electric vehicles, as well as exploiting domestic natural gas as a bridge to a cleaner future. But let’s not be deluded into thinking that any one actor, much less the president, can do much about short-run oil prices. It’s a near maxim of modern energy that he can’t do so.

Steve Yetiv is a professor of political science at Old Dominion University in Norfolk, Va. He is the author of “The Petroleum Triangle” and “The Absence of Grand Strategy.”

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