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Tags: Gas Prices

Expect the Perennial ‘Energy Trader’ Scapegoat



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With gasoline prices slated to reach an all-time high in 2013, we can expect President Obama to make another pledge to crack down on nefarious energy traders who are driving up prices of oil and gasoline. After all, he made that pledge in 2009, 2010, 2011 and 2012.

So why are gas prices rising? The Post lists several reasons, including Middle East tensions, but this one seems key: “Several refineries have been shut down for routine maintenance, and in the eastern United States, several refineries simply went out of business in the past year.”

As you often hear, the United States has not built a new oil refinery since 1976. Hess closed down its last refinery in New Jersey earlier this year. There’s an effort to build a new one in South Dakota, but that effort has been tied up in paperwork, permits, and lawsuits for six years and now people doubt it will ever be built. There’s now talk of a potential one in North Dakota.

Tags: Gas Prices , President Obama

Trading a Sales Tax Hike for Eliminating the Gas Tax?



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The midweek edition of the Morning Jolt offers a look at the ambitions of Stanley McChrystal, the predictable pattern of Obama meetings with foreign leaders like this week’s one with Karzai, a strange entertainment event at the White House, and then this breaking news out of Richmond…

Could Virginia Become the First State to Completely Eliminate Gasoline Taxes?

Would you trade eliminating your state’s gas tax for an increase of eight-tenths of a percentage point in the sales tax?

That’s what Virginia Gov. Bob McDonnell is proposing. His spokesman, Tucker Martin, lays it out:

The Governor will eliminate the gas tax and instead tie future transportation funding to Virginia’s sales and use tax, which will move from 5% to 5.8% with the new .8 dedicated completely to transportation.

 This will make Virginia the first state in the nation without a gas tax. Virginia will be a national leader.

 The switch from the gas tax to the sales tax is essentially revenue neutral in its first year.  And Virginia’s sales tax will remain lower than all of our neighbors and the District of Columbia.

 This change simply ensures that transportation receives the new funding it needs in the years ahead by tying it to a mechanism that moves in tandem with economic activity and inflation. That is how every other tax (corporate income/personal income) works. That is what will make transportation funding sustainable again.

 Right now Virginia’s transportation challenge breaks down like this: Virginia is sending $364 million a year from our construction account to our maintenance account. So instead of financing new projects, we’re having to use that money just to repair old roads. That crossover amount is anticipated to grow to $500 million by 2019. Long and short, Virginia needs new transportation funding to the tune of at least $500 million a year by 2019. This plan does that.

 This plan generates $844 million in new, additional annual transportation funding in FY 2019. It eliminates Virginia’s crossover issue. It provides $3.1 billion in new funding for transportation over the next 5 years, including $1.8 billion in new funding for construction projects.

Further, by eliminating the gas tax, Virginians will pay $3.5 billion LESS at the pump over the next 5 years. And there will be no sales tax on gasoline either.

Grover Norquist doesn’t like it. His group, Americans for Tax Reform, offered a counterproposal that, among other things, pulls more money for transportation from the state’s general fund, calling transportation a “core function of government” that must be met before other spending interests of state lawmakers are considered.

The greens are likely to scream bloody murder, as shown on the blog, Bacon’s Rebellion: “The new tax would punish pedestrians, telecommuters, cyclists, carpoolers and mass transit riders, who are doing the virtuous thing of driving less, while subsidizing the voracious appetites of drivers.”

Here’s the thing: all of those virtuous non-drivers still get the benefit of all of those roads and bridges that the state maintains; those groceries don’t just magically appear on the supermarket shelves, nor do the employees of every business they use just teleport into their jobs. So if transportation benefits everyone – I seem to recall Elizabeth Warren emphasizing how universal the benefit of roads and bridges are this summer – why shouldn’t everyone pay for them?

On the other hand, I might prefer paying a tax on something specific rather than a higher sales tax on everything I buy here. Why do I get the feeling swapping one tax for another will amount to a wash?

Pat Mullins, chair of the Republican Party of Virginia, offered this statement:

“Big ideas don’t come along that often in politics. Yet Governor McDonnell’s proposal to end the gas tax and still put more money to transportation is just that – a big idea that addresses one of our Commonwealth’s most serious problems.

 This plan acknowledges the reality that gasoline use has likely peaked, and higher mileage vehicles will only drive those numbers lower and lower. At the same time, it provides a dedicated stream of revenue that will grow as our economy expands.   

 I applaud the Governor for bringing this big idea to the table, I look forward to working with both Governor McDonnell and the General Assembly to both end the gas tax and improve our Commonwealth’s aging roads by seeing this proposal enacted into law.”

Tags: Bob McDonnell , Gas Prices , Taxes , Virginia

Hey, Whatever Happened to the $500 Checks for Gas Obama Promised?



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Oh, by the way, gas prices are averaging $3.70 per gallon again, which is what we were paying in May. That’s up thirty-five cents per gallon since July 1.

Hey, remember this unrealistic promise from the Obama campaign back in 2008?

Barack Obama and Joe Biden will require oil companies to take a reasonable share of their record‐breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple.  The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities. The rebates would be fully paid for with five years of a windfall profits tax on record oil company profits.

Where’s our $500 check, man?

You know who’s probably feeling disappointed when she fills up her car?

“It was the most memorable time of my life. It was a touching moment because I never thought this day would ever happen. I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage. You know, if I help him, he’s gonna help me.”

Tags: Barack Obama , Gas Prices

Gas Price Recovery Summer!



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Earlier this year, gas prices looked like they would skyrocket and become a big issue in the presidential election… and then they dipped some, and they disappeared from the headlines… and now… back up again:

Gasoline prices are up sharply in the past month on surging crude oil costs and refinery woes, and now are likely to make 2012 the costliest year ever at the pump.

Nationally, gasoline averages $3.70 a gallon — up 30 cents since mid-July and is now higher than year-ago levels in 39 states. Prices are likely to continue climbing through August, with little relief until after Labor Day.

The swift, month-long, 9% price climb has lifted 2012′s average to $3.61 a gallon, vs. 2011′s $3.51, which had been the most expensive year ever for motorists. Even with demand expected to recede after the peak summer driving season, 2012 will surpass last year’s price, says Brian Milne of energy tracker Telvent DTN .

The run-up comes at a time when prices typically have peaked for the year, and just weeks after decreasing demand and slowing worldwide economic growth pushed prices well off 2012 highs. The trend had prompted some industry experts to forecast $3 a gallon gasoline by autumn. Now, Milne expects a top at about $3.90 before dropping in September.

Gas price recovery summer!

Tags: Gas Prices

Obama Announces New ‘Oil-Market Manipulator’ Hunt Four Years Straight



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President Obama’s big initiative for the day is yet another pledge to crack down on nefarious energy traders who are driving up prices of oil and gasoline.

Today:

Under pressure to take action on rising gasoline prices, President Barack Obama wants Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions. The White House plan, which Obama was to unveil Tuesday, is more likely to draw sharp election-year distinctions with Republicans than have an immediate effect on prices at the pump. The measures seek to boost spending for Wall Street enforcement at a time when congressional Republicans are seeking to limit the reach of federal financial regulations.

If this pledge sounds familiar . . . it’s because Obama and his administration announce some new initiative to do this every year, usually as spring turns to summer and the price of gas increases as Americans drive more. It’s almost like the Cherry Blossom Festival.

Last June:

The Federal Trade Commission is investigating whether oil companies have engaged in anticompetitive practices or manipulated crude oil prices, the government’s latest salvo to rein in high energy prices. The commission said on Monday it was also looking into whether oil companies had provided false or misleading information to a federal agency related to the wholesale price of oil or petroleum products. “We remain committed to preventing and prosecuting any anticompetitive, fraudulent, or otherwise illegal activity which we identify through the foregoing investigation,” commission Chairman Jon Leibowitz said in a letter to Senator John Rockefeller, who called on the FTC in March to launch an investigation.

Just about one year ago today, April, 2011:

With U.S. gasoline pump prices soaring, the Obama administration on Thursday unveiled a working group of federal agencies to probe potential fraud in the energy markets. The White House is worried that if average gas prices rise above $4 a gallon, the economic and political fallout could dominate next year’s presidential campaign and drown out President Barack Obama’s message of economic recovery. Obama asked U.S. Attorney General Eric Holder to assemble a team of agency officials to “root out” cases of oil market fraud that affect pump prices, including actions by speculators.

March 2011:

Obama said he had ordered a review of why oil companies aren’t producing more petroleum on federal land, and said his administration would monitor “any possible manipulation in the oil markets” and work with state governments to monitor for potential price gouging at the gas pump.

July 2010:

Traders will face new rules aimed at making it easier for regulators to prove manipulation in markets for commodities such as oil, wheat and natural gas under the financial overhaul awaiting President Barack Obama’s signature.

And then in August 2009:

Energy traders and companies will face fines of up to $1 million a day if they manipulate oil markets, the Federal Trade Commission ruled on Thursday in a crackdown on fraud that they said causes widespread damage to the U.S. economy. The agency issued a rule, which takes effect November 4, to prohibit fraud or deceit both in the cash, or physical, energy markets and on the regulated futures exchanges.

Now . . . with gas averaging $3.89 per gallon nationally and much higher in many parts of the country, we can conclude that either every previous initiative announced by the administration was spectacularly ineffective at containing the nefarious menace of oil price speculators . . . or that oil-price speculators are not really the reason gas prices increase.

Tags: Barack Obama , Gas Prices , Oil

Great News! We May Pay Only $4 Per Gallon This Summer!



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Great news, America! This summer, the average cost of a gallon of gasoline might be only $3.70 to $4.01 per gallon!

Don’t you feel relieved? Aren’t you sighing with reassurance, knowing that the cost of shipping every item you buy at every store will be stable in the coming months at the current, oh-so-affordable level!

Hit it, Kool & the Gang! “Celebrate good times, come on!”

(That current level, by the way, has the average for the year to be $3.92, according to USA Today. The average for the year in 2008 — when they spiked to record highs in summer and then tumbled quickly as the economy collapsed in fall and December — was $3.36.)

Take it away, Crossroads GPS:

I know, I know. I wish we had a president who understood the pain that high gas prices can inflict on ordinary Americans. Somebody like this guy . . .

Tags: Barack Obama , Gas Prices

Quicker Oil and Natural Gas Developments... Next Year. Maybe.



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National average gas price today: $3.90 per gallon.

Last week, Secretary of the Interior Ken Salazar conducted a tour of booming oil production facilities in North Dakota and announced that his department would finally move its permitting process online, a move that industry has been requesting for years. Just how lengthy and slow-moving is the current system? “The changes will move the Bureau of Land Management, the agency responsible for oil and gas production on federal onshore lands, into the digital age by automating permitting and leasing decisions. Today, those negotiations are done on paper, and the back-and-forth has resulted in permits taking on average 298 days to approve.”

Finally, it won’t take nearly a year to approve a permit or lease! Let’s get out there and start drilling, baby, drilling, and… hey, when will the new system be in place?

“The new system, which is expected to be in full operation by May 2013.”

Oil and natural gas producers like the Independent Petroleum Producers of America are… underwhelmed, it would seem: “Although IPAA realizes that making changes to the current antiquated system may take some time, we hope your agency could make these changes in less than a year. Reducing unnecessary regulatory burdens and eliminating inefficiencies in government bureaucracy was a key part of President Obama’s announcement last month regarding the need to implement smarter, cost-justified regulations.”

Tags: Barack Obama , Gas Prices , Ken Salazar

After Long Delays, Obama Takes Tiny Steps Toward New Drilling



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Credit where it is due: President Obama’s Interior Department has taken a tiny step toward exploration for oil and natural gas off the coast of the Eastern seaboard from Delaware to Florida:

For the Atlantic, the administration released a draft environmental review outlining a 330,000-square-mile area from the Delaware Bay to Cape Canaveral, Fla., where seismic surveys could be conducted. The administration has no current plans to allow drilling in the Atlantic, though Mr. Salazar said that could change in light of the surveys.

Of course, this is after about a year’s delay. You can hear the “about time, guys” tone in the statement from Virginia governor Bob McDonnell:

It is encouraging that Secretary Salazar visited Virginia today to announce a small step forward in the development of our offshore energy resources. Unfortunately this small step forward follows many previous steps back. Virginia was poised to become the first state on the east coast to produce oil and natural gas offshore. This breakthrough would have led to the creation of thousands of new jobs in our state, generated significant new revenues for state and local governments, and led to more domestic energy production. Instead, this Administration cancelled Virginia’s scheduled lease sale for 2011, and pushed any possible lease sales to 2018, at the very earliest. With gas hitting $4 a gallon that seven-year self-ordered delay is more noticeable than ever. We should be looking for every opportunity to safely produce more domestic energy. Our citizens need the jobs; our nation needs the energy. Instead, the Obama Administration declared a seven-year timeout. That was the wrong decision. There is broad bipartisan support in Virginia for developing our offshore energy resources and Virginians support this common sense policy. We will continue to aggressively seek the lifting of these federal limitations on offshore oil and gas development. These decisions are leaving private capital that could be invested in expanding our domestic energy resources on the sidelines at a time when private investment in business expansion and job creation is so urgently needed to heal our ailing economy.

While we continue to be incredibly disappointed by last year’s decision, I do want to thank the Obama Administration for their announcement today.

Of course, seismic surveys are only the first step in developing any energy resources off the Eastern seaboard. Actually, I shouldn’t say any energy development; Virginia’s just given approval to another form that is supposed to be a source of bipartisan agreement. Now it’s up to the federal government:

The Virginia Marine Resources Commission has voted unanimously to approve proposed construction of a 479-foot-tall, 5 MW offshore wind turbine generator prototype in the lower Chesapeake Bay, three miles off the coast of Cape Charles, Va. The construction of the prototype turbine is scheduled to be completed in late 2013, which could make this project one of the first offshore wind energy prototypes in the U.S.The wind power project now requires approval from the U.S. Army Corps of Engineers and review by the U.S. Coast Guard.

And one other bit of reasonably good news:

Separately, the Interior Department approved Royal Dutch Shell’s oil spill response plan for Alaska’s Beaufort Sea on Wednesday.Shell is working to begin drilling off Alaska’s coast this summer after repeated regulatory delays for the company’s Arctic exploration program. Shell will still need well-specific permits before it starts drilling. Interior approved Shell’s response plan for Alaska’s Chukchi Sea earlier this year.

So, after weeks of insisting that the U.S. can’t drill its way out of its gas-price problems, the administration takes a step to approve drilling in one previously verboten area and a tiny step towards drilling in another one. Why, it’s almost as if the line the president was touting on the trail proved to be erroneous, and suddenly reached its expiration date . . .

Tags: Barack Obama , Gas Prices , Ken Salazar

Gas Up Twenty Cents Per Gallon in Past Month



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National average gas price this morning: $3.88 per gallon. One month ago: $3.68.

In that light, this poll result isn’t that surprising: “More than two in three Americans disapprove of how President Barack Obama is dealing with soaring gas prices, but don’t focus their blame on him for causing the problem, according to a new poll. Most Americans, 68 percent, disapprove of Obama’s handling of gas prices, including 89 percent of Republicans, 73 percent of independents and 52 percent of Democrats, a Reuters/Ipsos survey found Tuesday. Only one in four, 24 percent, said they approve of the president’s response to high energy prices.”

Tags: Barack Obama , Gas Prices

Surprise! Domestic Production Can Lower Gas Prices After All.



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The good folks at the Independent Petroleum Association of America — a trade group representing represents more than 6,000 independent oil and natural gas producers and service and supply companies across the U.S. – have put forth a new report discussing the relationship between domestic production and gasoline prices.

Their report reinforces what common sense would suggest: that while oil is traded on a global market, the pre-tax cost of gasoline is relatively cheaper when you are near the source and the refinery. Oil produced here in the United States has an easier time getting to a U.S. refinery – making it cheaper to produce than oil that has to be shipped here from overseas.

They begin by pointing out:

First of all, gasoline is not crude oil. Before crude oil becomes gasoline, it must undergo a series of transformations, which refineries play a crucial role. Although gasoline is not the only petroleum product that helps keep the U.S. economy running, it does account for nearly half of U.S. petroleum consumption (which is understandably why it receives the most attention in the media).  While petroleum products overall, including diesel fuel and jet fuel, make up 93 percent of energy used in U.S. transportation, gasoline alone accounts for more than 60 percent of U.S. transportation energy.

Here’s the key difference: domestic crude can be up to $20/barrel cheaper than imported crude oil.

American oil production has helped lower the price of many of our domestic crude streams in comparison to internationally-priced Brent and other imported grades. As a result, relatively abundant supplies in the mid-continent have in recent times put market prices for West Texas Intermediate (WTI) crude at some $10-$20/barrel cheaper than imported Brent crude.  As of mid-March, the difference was running at about $20/barrel. Further up the supply chain, Bakken crude itself was trading some $17-18 below WTI several weeks ago. Because of increased U.S. oil production, mid-continent refiners have seen lower costs for increased domestically-supplied inputs, while East Coast (and Caribbean) refiners have largely been faced with the higher cost of imported foreign crude oil.

They note that prices of the ingredient (crude oil) and the final product don’t always move in perfect symmetry. Examining prices between 2005 and 2007, they find, “EIA data show that the average crude oil price paid by refiners has more than doubled, rising the equivalent of $1.35 per gallon, while retail prices of gasoline have risen by about 50 percent, or about $1.10 per gallon. One has to be careful in one’s expectations of price symmetry between the raw material and the product.”

They point to three other factors that can make a big difference in what a customer pays when they fill up their tank:

Taxes on Gasoline Matter. On a much smaller but still significant scale, local taxes vary within the U.S. While the Federal excise tax is the same across the country at 18.4 cents/gallon for gasoline (and 24.4 cents/gallon for diesel), state and local taxes vary considerably. According to tax data compiled by the Energy Information Administration and other sources, taxes range from over 65 cents/gallon for New York, including Federal excise taxes, to 26.4 cents/gallon for Alaska. The national average is around 46 cents/gallon.

Burdensome Regulations Matter. Gasoline for sale in most major metropolitan areas is required by the EPA to meet tighter standards than gasoline sold in rural regions. Meeting these tighter standards can make that gasoline more costly to produce. Going further, California requires its own specific formulation of gasoline which must meet the most stringent requirements in the country. There are other various regional requirements, and by some counts, across the country there are at least 15 different gasoline formulations.

Infrastructure matters. Consumers geographically farther from the source of production are likely to pay more because of the higher cost of transportation and the need for more storage terminals to buffer fluctuations in shipments along the lengthy supply chain. Our piece on the dramatic rise of crude oil production in the Bakken in North Dakota highlighted the geographic distance between the location of ‘new’ production and where the major consuming areas are located, and requisite transportation infrastructure to move some of that crude oil beyond the mid-continent. The East Coast accounts for over 36 percent of U.S. gasoline consumption, but with relatively few refineries, the region only accounted for 7 percent of refinery runs in 2011. This may help explain why retail prices in the high-demand, refinery-poor Northeast, even after adjusting for differences in taxes, are higher than on the Gulf Coast, where roughly half of the nation’s refinery capacity operates. Also part of the mix is how certain refineries have been tailored with specific crudes in mind, resulting in differences in the products refined. East Coast refiners have traditionally targeted lighter, lower-sulfur crudes, while Gulf Coast refiners have more often focused on heavier and sourer crudes.

If the Northeastern states wanted cheaper gas, they could A) lower state gasoline taxes B) simplify the formulation requirements for gasoline sold within the state or C) build more refineries. (And all of you scoffed while driving down the New Jersey Turnpike. The Garden State has, by far, the cheapest gasoline in the region and the lowest taxes in the region.)

Tags: Gas Prices

Remember, ‘I Won’t Have to Worry About Putting Gas in My Car’?



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The first Morning Jolt of the week examines Rick Santorum’s big win in Louisiana’s Republican primary, how to change a “Righteous Mind,” and then this trip down memory lane…

That Infamous 2008 Quote: ‘I Won’t Have to Worry About Putting Gas in My Car!’

Over at Hot Air, Tina Korbe spotlights some comments from Tim Graham on how the media is discussing the current high gas prices.

It’s no surprise at all, but still worth a comment that the media have a double standard on the issue of gas prices, just as they do on the issue of civility and countless other issues. On “Your World with Neil Cavuto” yesterday, the Media Research Center’s Tim Graham outlined the differences between media coverage of high gas prices under George W. Bush and gas prices under Barack Obama. Bet you can guess which president received more leniency!

This really isn’t a hard or complicated issue to understand. A wide variety of factors contribute to the price of gas. The president doesn’t have control over all of them — but he does have significant control over energy policy in the United States and energy policy is one of the factors that contributes to the price of gas. It makes sense, for example, that if oil and natural gas companies have to pay more in regulatory compliance costs, they will price their products to compensate for the increase in regulatory compliance costs.

Does it make sense to place all the blame for high gas prices on the president? No — but neither does it make sense to excuse him, as though he has nothing to do with them. He should be held accountable for the policies he has put in place. As I’ve written repeatedly, nowhere are the president’s crony capitalistic tendencies more in evidence than in his energy policy. He rewards his preferred providers and punishes his least favorite. Caught in the middle of that is the consumer, who, under luxurious circumstances, surely cares about the environment, but, in tight times, cares most about affordability.

The blogger “Scared Monkeys” takes a trip down memory lane and writes, “The fact of the matter is that the MSM will willfully and purposely lie for President Obama. Is it any wonder why these folks have little to no credibility anymore? The MSM is all in for this President and it has become obvious to most. What was bad for Bush, should also be bad for Obama. However, if the MSM ever took an even keeled approach to reporting the news and the impact of Obama’s policies on “We the People”, his approval rating would be in the 30′s. Instead, they set the bar lower for Obama and change the narrative altogether. I wonder how Peggy Joseph feels these days about her comments she made in 2008 about now that Obama is the President she will not have to worry about putting gas in her car. Peggy, just a reminder for you that gas prices are presently $3.89, they were $1.84 when you made your comments. Hey Peggy, how’s that “Hopey-Changey” Obama will pay for your gas working out for you?”

By the way, my bet is that a large number of folks on the Right remember Peggy Joseph’s comments from 2008, and most on the Left don’t remember seeing that at all (if they ever did). “I won’t have to worry about putting gas in my car, I won’t have to worry about my mortgage. If I help him, he’s going to help me.” Conservatives seized upon that anecdote because it confirms our worst suspicions about the voters who prefer Democrats: That they believe at A) the purpose of government is to give them free stuff, to play a national Santa Claus and B) that government actually can and will give them free stuff.

I plugged “I won’t have to worry about putting gas in my car” into Google and found 48,700 results.

Not every person who voted for Obama thinks this way, of course. But a sufficient number of Americans do, leaving us wondering how we change these minds.

Tags: Barack Obama , Gas Prices

Obama’s ‘All-of-the-Above’ Energy Plan Rejects Many Options



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USA Today:  “As public angst grows over gas prices, President Obama hits the road today in hopes of reinvigorating his argument that the USA must embrace a broad strategy to reduce the nation’s dependence on foreign oil.The two-day trip, which will take him to the Copper Mountain Solar Facility 1 in Nevada, oil and gas drilling sites on federal land in New Mexico and a segment of the Keystone XL pipeline in Oklahoma, is an opportunity for the president to highlight his “all-of-the-above” energy strategy, which calls for investment in clean energy and expanding domestic oil and gas production.”

No, Obama doesn’t have an all-of-the-above energy strategy.

To Obama’s credit, under his watch, the U.S. Nuclear Regulatory Commission approved a license for two new nuclear reactors in Georgia. Of course, two new reactors are a drop in the bucket for our energy needs, as that was the first license issued since 1973.

Here in Virginia, the George Allen for Senate campaign is unveiling a gimmicky, but effective, web site that allows people to calculate how much more they have paid since Obama took office if gas had remained at the level of January 20, 2009, TooMuchAtThePump.com.

Then again, it just reminds me of this recent sight:

Tags: Gas Prices , Obama

Salazar Lied About Oil Production on Federal Lands



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Yesterday I pointed out that the production of fossil fuels on federal lands is down from fiscal 2010 to fiscal 2011 (October 1, 2009, to September 30, 2010, compared to October 1, 2010, to September 30, 2011).

This is significant because the administration is . . . well, lying. Not long ago, Interior Secretary Ken Salazar said, “The fact of the matter is we are producing more from public lands — both oil and gas, both onshore as well as offshore, than any time in recent memory.”

Not only is Salazar wrong, he’s wrong for every type of fossil fuel produced on federal lands.

Crude-oil production? Down from 739 million barrels to 646 million barrels in FY 2011.

Natural-gas production? Down from 5,415 billion cubic feet (Bcf) to 4,859 billion cubic feet (Bcf) in FY 2011.

Natural-gas plant liquids? Down from 115 million barrels to 111 million barrels in FY 2011

Coal production? Down from 478 million short tons to 470 million short tons in FY 2011.

Taken altogether, the total amount of fossil fuels produced from federal land hit 18.6 quadrillion British thermal units (Btu), lower than every year since 2003.

Senator Lisa Murkowski (R., Alaska) recently asked Bureau of Land Management director Bob Abbey about the discrepancy between administration claims and the most recent figures from the Energy Information Agency.

“The oil production from onshore federal minerals was down last year from previous years,” Abbey said. He pointed out that oil producers decide where to produce and develop and emphasized that there are many approved permits that are not being utilized right now.

Tags: Barack Obaam , Gas Prices , Ken Salazar , Lisa Murkowski , Oil

Energy Production on Federal Lands Declining Under Obama



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Darn that Energy Information Administration. They keep putting out data that conflicts with Obama’s boasts.

The latest EIA report:

Production and sales of fossil fuels from Federal and Indian lands can be influenced by a variety of factors, including, but not limited to, Federal leasing and regulatory policies. Total sales of all fossil fuels produced on Federal and Indian lands, which are measured in terms of British thermal units (Btu) to allow for aggregation across all fossil fuels, rose by about 1 percent between fiscal year FY 2009 and FY 2010 and dropped by about 6 percent between FY 2010 and FY 2011 (Table 1).

Crude-oil production? Down from 739 million barrels to 646 million barrels in FY 2011.

Natural-gas production? Down from 5,415 billion cubic feet (Bcf) to 4,859 billion cubic feet (Bcf) in FY 2011.

Natural-gas plant liquids? Down from 115 million barrels to 111 million barrels in FY 2011

Coal production? Down from 478 million short tons to 470 million short tons in FY 2011.

Taken altogether, the total amount of fossil fuel produced from federal land hit 18.6 quadrillion British thermal units (Btu), lower than every year since 2003.

So when Jay Carney or Barack Obama brags about increased domestic production, they mean on private lands, not on federal lands. In fact, the private-land boom has to be even bigger to overcome the lower production from federal lands.

Tags: Barack Obama , Energy , Gas Prices

Fracking: The Wedge Issue of 2012?



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The Pew Research Center reports that support for offshore oil drilling is back up to the levels seen before the Deepwater Horizon oil spill, but the more politically significant point might be in their findings on public attitudes towards the hydraulic fracturing method of extracting natural gas, or “fracking.”

Pew finds:

Support for allowing more offshore oil and gas drilling in U.S. waters, which plummeted during the 2010 Gulf of Mexico oil spill, has recovered to pre-spill levels. Nearly two-thirds (65%) favor allowing increased offshore drilling, up from 57% a year ago and 44% in June 2010, during the Gulf spill.

Currently, more than twice as many favor than oppose increased offshore drilling (65% vs. 31%). In June 2010, only 44% favored more offshore drilling while 52% were opposed. The balance of opinion today is almost identical to what it was in February 2010, two months before the Gulf oil disaster (63% favor, 31% oppose).

Unsurprisingly, some Americans aren’t familiar with fracking, but among those who are, support is fairly widespread. It’s an issue that pits Republicans, independents, and conservative and moderate Democrats on one side, against liberal Democrats on the other.

Among those who have heard about fracking, there is more support than opposition. About half (52%) favor fracking, while 35% are opposed to the process. As with opinions about many other energy policies there is a wide partisan gap in views of fracking: 73% of Republicans who have heard of fracking favor it, compared with 54% of independents and just 33% of Democrats . . .

Republicans who have heard at least a little about fracking are far more likely than Democrats to favor the process (73% vs. 33%), and there is little difference in opinion among Republicans. But among Democrats who are aware of fracking, there is a wide ideological gap. Conservative and moderate Democrats are split about evenly — 39% favor fracking while 43% are opposed. By contrast, liberal Democrats oppose fracking by a 64% to 26% margin.

Fully 89% of Republicans favor allowing more offshore oil and gas drilling while only half of Democrats agree. A majority of independents (64%) support increased drilling off the U.S. coast.

It’s a perfect wedge issue to separate Democratic officeholders from their liberal base.

Obama offered some praise for fracking, even though he didn’t use that particular term, in his State of the Union address (even though he exaggerated the government’s role in developing the technology).

The EPA’s final report on the safety of fracking will be completed in 2014. Environmentalists are hoping Obama will take a tougher line, and the oil and gas industries argue that existing state regulations on hydraulic fracturing techniques are sufficient, as more than one million wells have already been developed with this method. Obama’s Interior Secretary has indicated a desire to establish a system of federal regulations for fracking as well. Industry leaders say they have “repeatedly requested” that the Department of the Interior utilize the existing state-operated reporting system “instead of attempting to create a different, costly and unnecessary new reporting process.”

Tags: Barack Obama , Gas Prices , Polling

A Discordant Tune From the ‘Gas Hike Trio’



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The first Morning Jolt of the week features the outlook for the New York GOP Senate primary against Senator Kirsten Gillibrand, a not-so-surprising result in the Puerto Rico GOP presidential primary, and then . . .

I Prefer the Kingston Trio to the ‘Gas Hike Trio’

It isn’t the most original or innovative approach to an issue like this, but it will work:

Mitt Romney is ramping up attacks on President Obama over rising gasoline prices by calling for the firing of Obama’s Interior and Energy secretaries and the head of the Environmental Protection Agency.

The GOP presidential frontrunner dubbed them the “gas hike trio” on Fox News Sunday and at a campaign stop in Illinois Saturday night, signaling the extent to which Republicans hope to translate pump prices into a damaging political liability for Obama.

On Fox, Romney claimed that Obama’s stated desire for lower gas prices is an election-year turnabout. “The right course is they ought to be fired because the president has apparently suffered an election-year conversion,” Romney said, echoing a line of attack he unveiled the prior evening.

“No question in my mind that these — I call them the gas-hike trio — that those three are on a mission to drive up the price of gasoline and all energy so that they can finally get their solar and their wind to be more price-competitive. That’s what they want to do,” Romney said in Illinois Saturday, according to the Los Angeles Times and other outlets.

Of course, Obama won’t fire any of them. If he did, he would be admitting that they have done a lousy job, and that he by implication did a lousy job by picking them to perform those duties. No, Obama is backed into a corner, insisting that he has done everything right, his cabinet has done everything right, his policies are working as planned . . . and yet somehow, we’re headed to a summer of record gas prices.

Not long ago, Bill Clinton publicly urged Obama to “embrace” the Keystone Pipeline. Somewhere I get the feeling that Clinton is watching his television and yelling, “fire somebody!” Certainly, it’s what James Carville would recommend. Even the illusion of accountability is better for an embattled incumbent than a perception of lax, content, obliviousness, or a stubborn insistence that the current difficult circumstance is as good as it gets.

Obama is going to have no choice but to make this argument; CBS News Mark Knoller reported the president’s schedule for the coming week Sunday night: “On Wednesday, Pres Obama embarks on a 2-day 4-state swing to spotlight his energy policies. Stops include NV, NM, OK & OH. Energy stops incl: solar plant in NM; oil & gas production fields in NM, Keystone pipeline site in OK & energy research at Ohio State Univ.”

As I noted on Twitter, isn’t it an amazing coincidence how often President Obama’s “official business” requires him to hold rally-style events in swing states?

Tags: Barack Obama , Gas Prices , Mitt Romney

The President of the Flat Rhetoric Society



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The final Morning Jolt of what feels like a very long week features trouble for Sen. Dick Lugar, a much-needed lighter note inspired from a galaxy far, far, away, and then this bit of presidential campaigning on the taxpayer’s dime:

The President of the Flat Rhetoric Society

This president gets more indignant and intolerant as his term wears on, doesn’t it? After Solyndra, Ener1, Beacon Power, and gas approaching $5 per gallon, you would think this president might be a little more modest in arguing that he’s made the right calls. No, he still has the gall to insist that his critics are backwards and ignorant – at an “official”, not campaign, event, no less.

Although it was billed as an official White House event, Obama’s appearance took on the feeling of a campaign rally. Hundreds of enthusiastic students filled the college’s gymnasium and chanted “Four more years!”

Obama delighted them by blasting his Republican critics for their resistance to investing in alternative energy sources, comparing their stance to the beliefs of those who thought that Christopher Columbus would sail off the edge of the world.

Obama’s polls don’t always move in a direction I find logical, but part of me looks at statements like this and figures that independents have to be repelled in droves. This is so far from 2004’s “no red states or blue states, just red white and blue states” that made him a star in American politics. Take a look at that speech in Tucson: “it’s important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds… only a more civil and honest public discourse can help us face up to our challenges as a nation…  As we discuss these issues, let each of us do so with a good dose of humility.”

And now he’s mocking those who disagree with an energy policy that keeps funneling taxpayer money to stumbling companies run by his big donors as “The Flat Earth Society.”

Clayton Cramer scoffs, “Now, if you attended high school, or college, you would know (or should know) that there was no educated European who thought the Earth was flat.  None.  The dispute that made it hard for Columbus to get funding was that insisted the Earth was 18,000 miles in circumference, so the Indies were a plausible voyage west from Spain.  The experts who told the various governments of Europe that Columbus wasn’t going to be successful thought the Earth was closer to 25,000 miles around–and sailing west to the Indies was going to be a failure. Had there not been the Americas in the way, Columbus and crew would have died of thirst.”

Kenneth Green notices Obama emerging victorious from another tense fight with a straw man:

As it happens, I don’t agree with the whole “all of the above” thing, but most of Mr. Obama’s opponents do in one form or another:

Newt Gingrich: “My administration will pursue an “all of the above” American Energy Policy that allows expanded development of oil, natural gas, coal, biofuels, wind, and nuclear sources of energy.”

Mitt Romney: “Government has a role to play in innovation in the energy industry. History shows that the United States has moved forward in astonishing ways thanks to national investment in basic research and advanced technology. However, we should not be in the business of steering investment toward particular politically favored approaches. That is a recipe for both time and money wasted on projects that do not bring us dividends. The failure of windmills and solar plants to become economically viable or make a significant contribution to our energy supply is a prime example.”

“Concentrate alternative energy funding on basic research, utilize long-term, apolitical funding mechanisms like ARPA-E for basic research.”

Rick Santorum: “Expand domestic innovations and energy resources. This includes oil, natural gas, hydro, biomass, wind, solar, clean coal, and nuclear energy.”

Ron Paul: “Make tax credits available for the purchase and production of alternative fuel technologies.”

As for who likes gas-guzzling cars, well, the president really isn’t one to talk: His primary ride gets 8 MPG. But of course, comparing the presidential limo to a regular car would be, well, an unfair comparison, unlike, say, comparing people who disapprove of costly wind turbines and solar power parks to members of the Flat Earth Society.

Doug Powers informs us, “Quick factoid before we get started: Not many people know this, but the Nina, Pinta and Santa Maria didn’t rely on sails but were instead pushed to the New World by algae.”

Tags: Barack Obama , Gas Prices

Obama to Cameron: Let’s Use Our Emergency Oil Reserves!



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Not long ago, Louisiana governor Bobby Jindal laid out how President Obama had put placating his environmental allies ahead of developing America’s domestic energy resources, particularly in terms of oil — both in the pages of the Wall Street Journal and at a press conference after a governors’ meeting in Washington:

Several things he should be doing: For the last few years now, he’s been slowing down the leasing activity both offshore and onshore. When you look at oil and gas leasing on public lands, they talk about the record production here domestically. What don’t tell you is how much of that activity is taking place on private lands, and what they don’t tell you is how much of that activity is based on decisions made before he became president.

The president himself talked about how energy prices are being driven now by the sense of future risk, not that current supply and demand are imbalanced. One of the things a president can do is create a predictable environment for energy production. He hasn’t done that in permitting and leasing even now. Offshore, we’re still not up to normal permitting activity and we’re still not up to normal leasing in the Gulf.

As an administration, they can send a clear signal on fracking, procedures which have revolutionized our supply natural gas, that they’re not going to shut this down. That’s incredibly important . . . Take a look at the price of natural gas. It makes a tremendous difference if you’re a steel manufacturer, if you’re a fertilizer company, if you’re a plastics company. It makes a tremendous difference for those using natural gas to heat their home. It makes a tremendous difference to those who use natural gas to fuel their vehicles. This administration could send a clear signal that they understand that fracking is a safe way for us to produce energy and that they’re not about to shut that down. There’s tremendous concern in the industry. These are huge, multi-year capital investments. Companies are looking for certainty.

You talked about the CO2 emissions that could come out of the EPA. The mere threat of cap-and-trade regulation . . . A Democratic governor asked today, “Mr. President, what can you do in the short term?” Some Democratic congressmen have talked about using the Strategic Petroleum Reserve. Even the president himself said, releasing from the SPR without international action isn’t going to do anything, because other producers could just lower their production.

This president could stand up tomorrow and give a speech to the nation that says, “I understand how important it is for us to have affordable reliable energy, so I’ve instructed my cabinet heads to make sure we’re not issuing any regulations that are interfering with safe, sound domestic production of energy. I’m making sure we’re doing everything we can to bring more reliable energy to this country, and so I’m going to reverse my decision on the pipeline. I’m going to make sure Keystone gets built, so that we make sure the Canadians don’t go and sell their energy to the Chinese.”

We’ve got an ally that has been a steadfast ally and trading partner, for us to tell them we’re going to politicize the decision about whether they should sell energy to us or to the Chinese — that has an impact on supply and prices.

Maybe you can ask him to give that speech, since I don’t think he’ll listen to us.

Instead of any of these proposals, President Obama discussed another option with Prime Minister David Cameron.

President Barack Obama and British Prime Minister David Cameron discussed the possibility of releasing emergency oil reserves during a meeting on Wednesday, two sources familiar with the talks said, the first sign that Obama is starting to test global support for an effort to knock back near-record fuel prices.

Obama raised the issue during a broad bilateral meeting at the White House, according to a UK official with knowledge of the discussion.

The “emergency” would seem to be Obama’s poll numbers. Then again, this seems to be a Democratic-candidate tradition; Al Gore called for the same move while running for president in 2000.

Oil from the Strategic Petroleum Reserve has been sold five times in its history: Most recently in 2011 during the conflict in Libya; in 2005 after Hurricane Katrina; a sale of  $227 million worth of oil during fiscal year 1996 to reduce the federal budget deficit; in 1990–91 during Desert Shield/Desert Storm, and a small “test sale” in 1985.

Tags: Barack Obama , Gas Prices

Adjusted for Inflation, Gas Prices Look Even Worse



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The front page of today’s Washington Post declares in the lower right-hand corner: “On gas prices, voters blame Obama; experts disagree.”

Strangely, I don’t remember a variation of that headline in 2008 when George W. Bush was president.

But look beyond that, to the chart inside, which compares the average price of a gallon of gasoline over the past 90 years.

While the peak in the summer of 2008 was $4.27, the March 12 average of $3.83 surpasses everything else before it – from the beginning of the chart in 1920 (when only a small fraction of Americans owned cars!) and through the Great Depression and through the 1973 oil crisis and through the late 1970s and 1980s, the Persian Gulf War, and after 9/11. Note that every other spike in prices tends to coincide with economic hard times.

In other words, adjusted for inflation, today’s gas prices – in March! — are worse than during every preceding gas price spike, except the peak of summer in 2008. So what will the peak price be this summer?

In March 2008, the national average was $3.20 per gallon. By June it was $4.08.

The usually great Phil Klein says, “gas prices are highly volatile and it’s often hard to differentiate short-term fluctuations from long-term trends.” True enough, but there are a couple of factors driving up the price that aren’t likely to be alleviated between now and November: global demand, tensions with Iran, a weak dollar, industry fears that the administration is eager to impose new costs upon them, regulatory obstacles to expanding refinery capacity, etc. Then throw in the traditional increase in demand as summer approaches (which will slide as autumn arrives), and we’ll be enduring, at the very least, a long hot summer of high gas prices, even if autumn isn’t quite so bad.

And if we see a repeat of 2008′s scenario – a big run-up alleviated only by an economic collapse – well, President Obama will be toast under that scenario, too.

Tags: Gas Prices

ABC/WashPost Poll: Unstoppable Incumbent Now Trails Romney Again



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Good morning, Mr. President!

Disapproval of President Obama’s handling of the economy is heading higher — alongside gasoline prices — as a record number of Americans now give the president “strongly” negative reviews on the 2012 presidential campaign’s most important issue, according to a new Washington Post-ABC News poll.

Increasingly pessimistic views of Obama’s performance on the economy — and on the federal budget deficit — come despite a steadily brightening employment picture and other signs of economic improvement, and they highlight the political sensitivity of rising gas prices.

Gas prices are a main culprit: Nearly two-thirds of Americans say they disapprove of the way the president is handling the situation at the pump, where rising prices have already hit hard. Just 26 percent approve of his work on the issue, his lowest rating in the poll. Most Americans say higher prices are already taking a toll on family finances, and nearly half say they think that prices will continue to rise, and stay high.

The negative movement has also stalled what had been a gradual increase since the fall in the president’s overall approval rating. In the new poll, 46 percent approve of the way Obama is handling his job; 50 percent disapprove. That’s a mirror image of his 50 to 46 positive split in early February. The downshift is particularly notable among independents — 57 percent of whom now disapprove — and among white people without college degrees, with disapproval among this group now topping approval by a ratio of more than 2 to 1, at 66 versus 28 percent.

These groups are also the ones whose shifting support has re-shuffled prospective general-election matchups. Among registered voters, Obama is now on par with Romney (47 percent for the president, 49 percent for Romney) and Santorum (49 to 46 percent). Previously, Obama held significant advantages over both.

The sample for this poll splits 31 percent Democrat, 27 percent Republican, 36 percent Independent.

The Post’s last poll, February 12, split 34 percent Democrat, 23 percent Republican, 37 percent Independent.

They asked, “Do you think there’s anything the Obama administration reasonably can do to reduce gasoline prices, or do you think gas prices have risen because of factors beyond the administration’s control?” They found 50 percent responded the administration can do something; 45 percent said “beyond their control.”

Back in May 2006, 62 percent thought that the Bush administration could do something about the price of gas, and only 35 percent thought it was beyond their control.

UPDATE: Ed Morrissey had wondered why the Post stopped revealing the partisan breakdown of their poll samples. Now we know why!

Tags: Barack Obama , Gas Prices , Mitt Romney , Rick Santorum

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