Tracking The Origins Of The "Blame Obama For Gas Prices" Talking Point

Since at least last summer, conservatives have been parroting the oil industry talking point that President Obama is somehow the one responsible for the spike in gasoline and oil prices. As we have pointed out, they base this on their assertion that the President has been “hostile” towards the dirty energy industry by prohibiting drilling and denying the passage of the Keystone XL Pipeline proposal. While the Keystone deal is currently on hold (although not even close to being off the table,) the assertion that the president has been hostile to the oil industry is beyond false.

Furthermore, the claim that Obama is responsible for the rise in gasoline prices is untrue on all premises. Just this week, the Associated Press released a report explaining the numerous ways in which gasoline prices are far beyond the control of the President, regardless of his actions or policies that he puts in place regarding oil exploration. Here are some highlights from the new report:

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

If more domestic oil drilling worked as politicians say, you'd now be paying about $2 a gallon for gasoline. Instead, you're paying the highest prices ever for March.

Political rhetoric about the blame over gas prices and the power to change them – whether Republican claims now or Democrats' charges four years ago – is not supported by cold, hard figures.

Sometimes prices increase as American drilling ramps up. That's what has happened in the past three years. Since February 2009, U.S. oil production has increased 15 percent when seasonally adjusted. Prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more.

U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon when adjusted for inflation. But that's not what prices are now.

That's because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.

But all of these are facts that we have pointed out in the past. The real question at this point is why the talking point still exists. To understand why we’re still hearing it on a nearly-daily basis, we have to find out where it came from.

Beginning last June, the Koch-funded group Americans for Prosperity took their “blame Obama” talking point on the road to help spread anger about the rising price of gasoline. Their “Running On Empty” tour made stops across the country hoping to “teach” Americans exactly how President Obama was making them fork over more of their cash when filling up their tanks. As I wrote last June:

AFP conveniently ignores the fact that gas prices were north of $4 a gallon during the Bush administration, when they peaked at $4.12, as pointed out by protesters who showed up at one of AFP’s early gas tour events in Nebraska. But in the alternate reality that AFP is creating to enable Koch’s further oil profits, it’s somehow all Obama’s fault.

Here are the specific actions the president has taken, according to AFP, that have raised gas prices:

Illegal Moratoriums: After the Deepwater Horizon accident in the Gulf, President Obama issued a moratorium on all new offshore drilling. The message is clear: Obama is against domestic energy production.

Canceling existing oil and gas leases: Amazingly, not only has Obama blocked any new permits but he’s also reaching back and canceling drilling leases that were already in place when he took office.

Locking up lands in the West: The federal government is working overtime to make sure Americans cannot access their own domestic resources.

EPA’s job-crushing regulations (you can read the truth about these “job-crushing” regulations here.)

At the same time AFP was holding their “Blame Obama” tour, numerous Koch-funded GOP Congressmen were holding their own publicity stunts to bring attention to gas prices (and blame Obama):

Several freshman GOP Congressman have taken it upon themselves to stage “gas pumping events” at gas stations in their jurisdictions to promote the lie that the rise in price is Obama’s fault. Two of the four Republican congressman involved in these stunts – Jeff Duncan (SC) and Todd Young (IN) – have taken $2,500 and $5,000 respectively from Koch Industries.

But the tours were not the Kochs' and AFP’s only efforts to paint Obama as the villain in this story – They also ran coordinated TV ads across the country making the claim that Obama was responsible.

What is ironic about the Kochs' trying to blame Obama for gas prices is that the Kochs themselves have actually played a significant role in driving the price of crude oil higher by speculating on oil futures and holding reserves offshore until prices climb higher.

Oddly enough, several weeks ago the Koch-funded Cato Institute publicly admitted that Obama is in no way responsible for rising gas prices. Unfortunately, that talking point has not caught on as quickly as their “Blame Obama” talking point did.

The AFP tour, ads, and the gas-pumping events were among the first national efforts to blame the President for the price of gasoline. And it didn’t take long for the rest of America’s right wing to take the idea and run with it.

One of the biggest talking point-pushers has been the American Petroleum Institute (API). As recently as this week, the organization has continued to blame the President for the price of gasoline (statements from API president Jack Gerard):

“We urge the administration to promote more domestic resources of oil and natural gas. Provide more access to ample U.S. supplies. Approve the Keystone XL pipeline. Temper the drive for layer upon layer of new regulations. And abandon proposals to impose on the industry billions of dollars in new taxes that would harm investment in the U.S. and the jobs that go with it.”

“Most U.S. resources have been placed off-limits. The U.S. oil and natural gas industry is currently allowed to explore, develop and produce on less than 15 percent of the federal offshore areas. More than 85 percent of those areas are off limits, denying all Americans the benefit of producing those resources … benefits like greater supplies of crude oil and natural gas, job creation and significant returns to our treasury in taxes, rents, royalties and bonus bids.”

Ironically, while API President Jack Gerard was laying partial blame on Obama, even Rex Tillerson, CEO of Exxon, said that the rise in gas prices is solely the result of rising global crude oil prices.

But the talking point is being pushed by more than just those with a financial stake – It is also being pushed by those who hope to gain politically from the blame game.

As Media Matters has pointed out recently, Fox News has done an amazing job pushing the idea that President Obama is the one responsible for our pain at the pump. Rather than pointing out the administration’s efforts to improve fuel economy (something the network said was a bad idea,) they instead decided to hammer the President on the bogus claim that he was prohibiting oil drilling.

Fox reported on the issue of gas prices more than any other news outlet, and more often than not, they laid the blame squarely at the feet of Obama. The following chart of coverage of the issue is from Media Matters:


And as we all know: As Fox News goes, so goes the Republican Party.

Presidential candidate wannabe’s
including Mitt Romney, Rick Santorum, and Newt Gingrich have all attempted to blame the President for gas prices, conveniently forgetting that the last Republican president saw gas prices top more than $4 per gallon while in office (and while they all remained completely silent on the issue.)

We currently have industry, media, and politicians pushing a completely bogus talking point to the American public. And even with all of the evidence and reports that clearly show that this talking point is false, it is incredibly unlikely that they will back off of it before the 2012 election.


“But the rise in gas prices has almost nothing to do with energy policy. It has everything to do with America’s continuing failure to adequately regulate Wall Street. But don’t hold your breath waiting for Republicans to tell the truth.

As I’ve noted before, oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter. Demand for oil isn’t rising in any event. Demand is down in the U.S. compared to last year at this time, and global demand is still moderate given the economic slowdowns in Europe and China.

But Wall Street is betting on higher oil prices in the future — and that betting is causing prices to rise. The Street is laying odds that unrest in Syria will spill over into other countries or that tensions with Iran will affect the Persian Gulf, and that global demand will pick up as American consumers bounce back to life.

These bets are pushing up oil prices because Wall Street firms and other big financial players now dominate oil trading.

Financial speculators historically accounted for about 30 percent of oil contracts, producers and end users for about 70 percent. But today speculators account for 64 percent of all contracts.

Bart Chilton, a commissioner at the Commodity Futures Trading Commission — the federal agency that regulates trading in oil futures, among other commodities — warns that too few financial players control too much of the oil market. This allows them to push oil prices higher and higher — not only on the basis of their expectations about the future but also expectations about how high other speculators will drive the price.

In other words, a relatively few players with very deep pockets are placing huge bets on oil — and you’re paying.”

Why Republicans Aren’t Mentioning the Real Cause of Rising Prices at the Gas Pump