http://www.thenewstribune.com/2011/03/26/1601327/republicans-see-high-gas-costs.html#storylink=mirelated
Northwest News
Sunday, March 26, 2011, Tacoma, WA
POLITICS
As the national average price for a gallon of regular gasoline hit $3.56 on Friday, Republicans on Capitol Hill geared up to make a little noise.
WASHINGTON, D.C. – As the national average price for a gallon of regular gasoline hit $3.56 on Friday, Republicans on Capitol Hill geared up to make a little noise.
On Thursday, the House Natural Resources Committee will hold a hearing on the effect of rising gasoline prices on families and businesses as part of its effort to determine “what has or hasn’t been done” since President Barack Obama took office two years ago.
Pasco Republican Rep. Doc Hastings, the panel’s chairman and a nine-term congressman, already has an answer. He says the president “has done nothing” by not moving fast enough to allow more oil drilling in the Gulf Coast and on public land. And he says his hearing “will put a spotlight on the issue.”
With the average price already exceeding $4 a gallon in Alaska and Hawaii and public anger growing, the GOP – led by Hastings – is hoping to capitalize on a potent political issue.
But Obama has plenty of defenders who say the president is being unfairly blamed for something he has little control over. They say that prices are rising because of increased global demand, instability in the Middle East and oil speculation on Wall Street.
As the new chairman of the committee, Hastings gets a loud megaphone on the issue, and he’s using it.
“Since the president’s earliest days in office, his administration has blocked, delayed, hindered and obstructed energy production across America – from coast to coast, onshore and offshore, and all the way up to Alaska,” Hastings said.
He said that Americans “know what $4-per-gallon gasoline feels like – and they don’t want to go back to those days.” And he said he is hearing about the issue from constituents whenever he goes home to his large Central Washington district.
“Listen, I’m in a rural area,” he said. “Rural areas are more impacted than urban areas.”
As he conducts his hearings into gasoline prices and other issues, Hastings will be aided by an Office of Oversight and Investigations that he created this month. Hastings said it will have “multiple staff” members with experience as attorneys and investigators. His committee already has a communications team of six to help Hastings get his messages out.
LARGER MARGIN REQUIREMENTS
Democrats say the GOP is simply playing politics with a hot and volatile issue.
In a speech on the Senate floor, Democrat Jeff Bingaman of New Mexico, the chairman of the Senate Energy and Natural Resources Committee, said it’s “a fundamental truth” that the primary driver of gasoline prices is the price of crude oil. He noted that gasoline-price movements have exactly tracked with global crude oil prices for the past three years.
“The idea that our gasoline prices are high today because of some policy of the Obama administration is just not supported by the facts,” Bingaman said.
Twelve other Democratic senators, including Washington’s Maria Cantwell and Patty Murray, entered the fray last week, saying that oil speculators are mainly responsible.
“There is strong evidence that the recent surge in gas prices has little to do with the fundamental supply and demand for oil,” they said in a letter to Gary Gensler, the chairman of the U.S. Commodities Futures Trading Commission.
They asked Gensler to impose larger margin requirements for speculative oil contracts. Margin is the amount of money a person must put up to purchase futures contracts.
“Washington drivers are paying at the pump for reckless Wall Street oil speculation,” Cantwell said.
The bickering on Capitol Hill has intensified as prices have spiked in recent months.
Friday’s national price of $3.56 a gallon compares with $3.19 a month earlier and $2.81 a year ago, according to AAA. Prices ranged from a low of $3.36 in Wyoming to a high of $4.19 in Hawaii, the auto association said.
Across Washington, the average price was $3.74. In Tacoma, the average price hit $3.75 on Friday, compared with $3.44 a month ago and $2.97 a year ago. In Olympia, it was $3.76 on Friday, compared with $3.44 a month ago and $3 a year ago.
Obama is clearly sensitive about the criticism.
Two weeks ago, on the same day that an earthquake and tsunami hit Japan, the president called a news conference to empathize with Americans, saying “families feel the pinch every time they fill up the tank.”
Obama said that three years ago, before the recession hit, rising demand from emerging economies such as China drove gasoline prices to more than $4 a gallon.
After the recession drove down demand and prices fell, Obama said, they increased again in the past year as the economy improved and global demand rose. The president added that turmoil in North Africa and the Middle East has added uncertainty to the market and that Libya’s lost production has tightened supply.
OIL PRODUCTION UP
He defended his record, noting that oil production in the U.S. last year rose to its highest level since 2003, with imports accounting for less than half of what Americans consumed for the first time in more than a decade.
“So any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn’t match up with reality,” Obama said.
Experts say there’s no shortage driving the increase in gasoline prices. There are at least 4 million barrels a day of spare oil production capacity globally, they say.
Despite the rising prices, U.S. gasoline inventories are exactly what they were a year ago, Ed Yardeni, a veteran financial analyst, said in a recent note to investors. Crude oil stocks are where they were two years ago, he added.
Yardeni suggested the biggest driver of the current surge in prices is speculation by people who have little interest in oil except as a way to gamble their money. He said the latest U.S. government report on oil speculation found that large speculators had acquired options to purchase almost 80 percent of the world’s entire inventory of oil.
Instead of talking about drilling more oil domestically to reduce U.S. reliance on foreign oil, some experts say the focus should be on conservation.
“The most important thing that we can do for consumers in the short term is to make a long-term commitment to reduce our gasoline consumption by improving the fuel economy of our vehicles,” Mark Cooper, director of research for the Consumer Federation of America, told a congressional panel last week.
Cooper said U.S. gasoline prices this year are projected to reach a record high as measured in either current or inflation-adjusted dollars. For low- and middle-income families, that will mean that the cost of gasoline will be the single largest expense in their cost of driving, costlier than owning a vehicle.
Kevin G. Hall of the McClatchy Washington, D.C., bureau contributed to this report.
Special thanks to Richard Charter