Never ones to let facts get in the way of a good political smear, House Republicans released a report blaming President Obama and the Democrats for high gas prices in America. The House Committee on Oversight and Government Reform, led by Republican Representative Darrell Issa, claims that the president has launched a concerted effort within the government to keep energy prices high in order to force “green technology” on the public.
The new report says that onerous environmental policies put in place by the administration and enforced by the EPA are causing domestic energy prices to rise dramatically, effectively killing jobs and hurting every American who drives a car. They also say that Obama is limiting oil companies’ ability to drill for “American” oil in places like the Gulf of Mexico and the Arctic National Wildlife Refuge, and that the President is not allowing them to exploit the natural resources of our country by imposing limits on hydraulic fracturing.
The committee went as far as to call for a full blown hearing last week, where they grilled EPA administrator Lisa Jackson and David Hayes, Deputy Secretary at the Department of the Interior, on the necessity of environmental policies that hinder domestic energy production. Here are a few highlights of the Committee’s report:
Many of the “green” energy sources promoted by the administration “create unintended environmental, security and economic consequences,” for example, by increasing the demand for Chinese “rare earth” materials, which subsequently boosts harmful coal production because that’s where more than two-thirds of China’s energy comes from.
Current administration policies have limited the domestic production of oil by restricting access to resources located along the outer continental shelf. Many of these restrictions were put in place before the disastrous Gulf oil spill.
Despite the fact that the United States relies on carbon-based fuels for more than 80 percent of its energy needs, the Obama administration has been “aggressively suppressing” the utilization of these fuels.
While their points might look good on paper or in 10-second sound bites, they are not even close to reality. For example, the GOP says that Obama has prevented industry from drilling in the Gulf of Mexico, and that he is not allowing them to drill on public lands, such as the Arctic National Wildlife Refuge. But as we’ve reported in the past, Obama has actually opened up more areas of the Gulf for drilling, and is currently actively working to open up areas of Alaska for oil drilling. Even in the wake of the BP oil disaster, he is still allowing more drilling permits for deepwater drilling.
They also ignore the fact that before the recession, and before President Obama was in office to enact any of these “price-raising policies,” American consumers were paying more than $4 per gallon of gasoline at the pump. Not surprisingly, this little nugget of information didn’t make it onto their list.
Also notoriously absent from their laundry list of factors driving up gasoline prices was the role of oil speculators. Writing for The Nation, author Chris Hayes describes how oil speculators are driving up the cost of gasoline:
In the wake of the price explosion in the summer of 2008, a bubble that extended to all kinds of commodities, including copper and wheat, a number of observers from George Soros to Hedge Fund manager Michael Masters to former Commodities Future Trading Commission staffer and derivatives expert Michael Greenberg concluded that the underlying supply-and-demand fundamentals couldn’t account for the sharp rise in prices. In the first six months of 2008, US economic output was declining while global supply was increasing. And even if supply and demand were, over the long run, pushing the price of oil up, that alone couldn’t explain the massive volatility in the market. Oil cost $65 per barrel in June 2007, $147 a year later, down to $30 in December 2008 and back up to $72 in June 2009.
The culprits, they concluded, were Wall Street speculators.
Commodities markets involve essentially two kinds of participants: there are so-called “end users” like farmers and airlines that use commodities markets as a form of insurance against future price fluctuations, and then there are speculators—hedge funds, investors, big banks that try to make money by correctly betting on those same price fluctuations.
But again, this information was absent from their new report.
There is no reason to believe that Congressional Republicans want to help lower gas prices for American consumers – their only goal is to help the oil companies that put them in office make more money. Issa, who led the hearings, has taken in more than $140,000 over his career from the oil industry, and close to $200,000 from electric utilities. The newly created House Energy Action Team is stacked with Republicans who are awash in dirty energy industry cash.
There is no quick fix for U.S. energy policy. Today, domestic oil production is higher than any time in almost a decade, yet American consumers are still getting robbed at the gas pump. Until the Obama administration gets serious about alternatives, this robbery, and the lies from the Republicans, will continue to happen on a regular basis.