Wed February 29, 2012
Op-Ed: Gas Prices Are Not A Political Issue
Originally published on Wed February 29, 2012 11:28 am
JOHN DONVAN, HOST:
This is TALK OF THE NATION. I'm John Donvan.
Well, $4 a gallon. That is where we are in many parts of the country now at gasoline prices. And somehow, the figure is not a record, but it always feels like a landmark. It is unbelievable and maddening. And who are people mad at? Well, you choose: A, it's the president's fault for getting in the way of drilling and pipelines, or, B, it's the Republicans' fault for letting the oil companies do what they do. But what about C, neither of the above? Charles Lane is a Washington Post columnist who says C really is the right answer, that politicians don't really have that much clout when it comes to what gasoline prices are.
But they pretend to do so so that they can get some election-year ammunition out of it. And by doing so, he says, they are insulting our intelligence. We're going to be talking with Charles Lane in just a moment. But first, I want to ask you: What do you think? Do the politicians deserve to get a pass on gasoline prices? Or is it their fault? Out number is 800-989-8255. Our email address is email@example.com. And you can join the conversation on our website. Go to npr.org, and click on TALK OF THE NATION.
The question: Is the price of gas really something that the president is responsible for or the Congress or neither? Charles Lane's op-ed "Driving the Politics Out of Gas Prices" ran in The Washington Post on Feb. 27. He joins us now from studios at the newspaper. Charles, welcome back to TALK OF THE NATION.
CHARLES LANE: Hey, John. How are you?
DONVAN: I'm terrific. And thanks for joining us. So do you really mean that the president has nothing to do with the price of gas as it comes and goes and comes and goes and rises and falls?
LANE: Almost nothing, and I would have said that if George W. Bush were still president and Democrats like Nancy Pelosi were holding press conferences as they did to attack him when gas went up to $3.15 a gallon. It is no particular defense of Barack Obama. It's simply a statement of reality, which is that, overwhelmingly, the price of gas is linked to the price of crude oil, which, itself, is subject to all kinds of global economic factors that even so mighty an entity as the U.S. government can't control.
DONVAN: Well, I want you to listen to something. This is a voice that will be recognizable, but in case you don't know, he is the current president of the United States. He sent the following when he was running for president of the United States about the former president of the United States.
(SOUNDBITE OF ARCHIVED RECORDING)
SENATOR BARACK OBAMA: We could have headed off $4-a-gallon gas and begun to end the tyranny of oil in our time. Instead, the president decided to spend our money on tax cuts for corporations and the wealthy and a war in Iraq that has already lasted longer than World War II.
DONVAN: So candidate Obama saying $4 gas was George Bush's fault. Are you surprised to hear that? Is that part of the discourse always and forever?
LANE: That is part of the discourse. And, you know, these are poll-tested and focus-group-tested themes where they take one thing, gas prices, that bothers everyone, and they link it up to something else, in this case, maybe the war in Iraq, that also bothers some people. And they say the one causes the other. But seriously, most experts on this will tell you that it's the worldwide demand for crude oil that has been driving gas prices over the last decade, coupled with factors such as the recession in 2009, which temporarily drove it down.
DONVAN: It's such a viscerally unsatisfying answer to hear when you're paying $4, and sometimes in some places, even close to $5, to hear that it's some vague world market thing, China demand, et cetera. And you feel that maybe you don't understand it and you need an economics degree for it. And you really do...
LANE: I find it satisfying, John, because it's true. And I always find the truth more satisfying. But you're right. There is great anger out there. And it's something people quite understandably feel every day. Oh, my God. Here goes more money right up the - you know, the economists have a fancy word for this: inelastic demand. Your demand for gasoline is something you really can't change very much in the short term. But in fact, American drivers have been reducing their consumption quite significantly in a cumulative sense over recent years, and that has been in response to a higher drift in gas prices. So that's actually kind of a self-correcting mechanism that, you know, will take some more time to kick in, but has kicked in already.
DONVAN: Well, Rick Santorum, of course, is on a bit of a roll lately. And guess what he said the other day.
(SOUNDBITE OF SPEECH)
RICK SANTORUM: Because of the mismanage of the president's policies overseas, because of his mismanagement of the Persian Gulf and our friends in the state of Israel, we see a tension and rising prices. I was talking to some folks in Chicago the other day, and they are anticipating $5 a gallon for gasoline in Chicago.
DONVAN: When, Charles, Rick Santorum says that, and when we heard as candidate Obama said about President George Bush, to the general public, what is - what impression do they leave the general public holding about what the president can actually do? In other words, in this narrative, what is it imagined that the president can actually do about gasoline prices?
LANE: Somehow orchestrate peace in the Middle East, right, so that never again in our future will an unstable Middle East cause disruptions in the world or oil market and, therefore, lower gas prices, I guess. But, you know, in the second half of last year, gas prices went down significantly. And I don't recall anyone saying then Obama deserves credit for that or Obama had done something magically different in the Middle East to make that happen. And the reason is he didn't deserve any credit for it.
Gasoline prices generally go up at this time of year as stocks are built up and refineries retool for the summer. They plateau in the summer at a higher-than-average level, and then they go back down in the fall and winter when the summer driving season is over. And I guarantee you, John, you're never going to hear a politician stand up and say, by gosh, the president has done it again. Gas prices are going down this winter.
DONVAN: So is this an exercise in cynicism or do the politicians actually believe that if I got to the White House, I could do something about the price of gasoline?
LANE: Well, there's a lot of cynicism in it. But there is sincere disagreement between our two parties about the best way to proceed. The Republicans generally want to emphasize domestic oil production to increase the supply of conventional fossil fuels, and the standard Democratic prescription has been alternative energy and so forth on so on. And, you know, both have their plusses and minuses but neither one is any kind of short-term fix to a particular spike in gasoline prices. One of the upsides of higher crude cost globally has been to spur a lot more domestic production in the United States. Obviously, people in that business seeking the higher returns - that's why we've had all this fracking of shale oil in North Dakota - and greater production.
DONVAN: It's a good time to belong to the petroleum business because...
DONVAN: I want to bring in some callers. People are lining up to - I'm not sure if they want to debate your thesis that the president has nothing to do with gas prices or agree with it. But I want to bring in Dan from Santa Clara, California. Hi, Dan. You're on TALK OF THE NATION.
DAN: Hi. Hello. Thanks for taking my call.
DAN: Yeah, I mean, I agree and I disagree that, of course, short-term political gains and what can be done are very brief. It seems to me, though, that, you know, world prices of gas have been historically much higher than American prices of gas, which may become - becoming more in line with the way it cost in Japan per gallon, Germany per gallon. So in a way, gas prices are actually a little bit lower here compared to world prices. No one ever talks about that.
DONVAN: No one wants to hear that is, I think, is...
DAN: Maybe I'm incorrect but it seems that way when I go to Europe.
DONVAN: No, no, you're true. You're absolutely true and there's no - there are tax structures also overseas that are a lot higher as well than here.
LANE: Absolutely. Most countries overseas tax gasoline and diesel, which is used for automobiles in Europe at several dollars a gallon.
DONVAN: Dan, though, do you think that in the short term that anybody in the White House has anything to do with the price of gasoline? And when I say short term, I mean it's gone up this winter, that's the president's fault. It's gone up next winter, that's the president's fault. Do you buy that or not?
DAN: I guess the only answer would be if I try to - I tend to ignore the headlines, so no.
(SOUNDBITE OF LAUGHTER)
DONVAN: All right. Dan, thanks very much for your call. I also want to bring in Chad from Huntington, West Virginia. Hi, Chad. You're on TALK OF THE NATION.
CHAD: Hello. I would have to say that yes and no politicians are beholden to high gas prices. They are behold - they owe it to the American people to negotiate with oil-rich companies to make sure that we can get the lowest prices that we can possibly get. But they also cannot point a finger whenever things goes bad at each other because that's not the - that shouldn't be their prerogative of, oh, things have gone bad, let's point the finger at so and so.
DONVAN: But you feel that the White House should be negotiating oil prices?
CHAD: Perhaps not the president to say alone, but I would have to say that I think this is one of those bipartisan issues in which both parties need to come together because, yes, Republicans and Democrats have their separate ideas of alternative fuels or of gasoline, fossil fuels, whatever. But still, regardless, the American people need fuel, whether it be solar, whether it be gasoline. We need fuel, and they are responsible to make sure that we can get what we need at a low - at the lowest price possible.
DONVAN: All right. Chad, thanks very much for your call. I want to - Charles, I want you to listen to something that Newt Gingrich said, and I want to ask you if it's more nuanced than we've - what we heard already.
(SOUNDBITE OF SPEECH)
NEWT GINGRICH: If the president had signed the Keystone pipeline, 700,000 barrels a day of Canadian oil would be flowing to Houston. If the president had reopened the Gulf of Mexico the way he should have, 400,000 additional barrels a day would be under production. If the president would open known areas in Alaska that we already know have oil, there's another 1.2 million barrels right there. This is without opening up any place else. But if the president had prepared to open up a lot of other areas, I think you could see a surge in production pretty dramatically. And if we had a couple of tax changes, including 100 percent expensing so all new equipment could be written off in one year, you would see so many independents out there exploring and developing new sources of energy.
LANE: Well, as usual with Newt Gingrich, it's kind of a mouthful, but let's try and go through it. The Keystone pipeline, now, obviously, that will affect 700,000 barrels of oil. It sounds like a lot, but our daily consumption is many times that. And, of course, it wouldn't have come online even if President Obama had approved it this year, until 2015, so it wouldn't have had very much to do with this year's price of gas. But sure, it would've increased the supply of oil, query whether demand would have matched it anyway.
On the offshore thing, you know, there's a lot of - the Gulf of Mexico. I think he has a fair point about the president sort of maybe slow-walking permits in the Gulf. But he can't forget we had massive oil spill in 2010 that, you know, there had to be some response to that. You couldn't just blithely resume business as usual without taking account of that, and there were tradeoffs. There were a lot of businesses and real estate interest and tourism folks along the Gulf Coast who were very badly affected by that. I'm not talking, you know, sort of soft-willed environmental interests. I'm talking about hard economic interests that were at stake as well. So I think Mr. Gingrich's view is a little - of the problem is a little one-sided.
DONVAN: Let me ask you point blank. Do we get to be mad at anybody?
(SOUNDBITE OF LAUGHTER)
LANE: Well, I think we should be mad at everyone, including ourselves a little bit. I mean, let's face it. Why are - is there so much pressure on the price of oil? It's because we use it. We drive our big cars, and sometimes we drive them around the block to the grocery store when we don't necessarily have to. Part of what concerns me here is the, you know, the passing the buck to a few guys in Washington for a problem that's really, to the extent it's a problem at all, is the doing of each and everyone of us. And maybe we should think about that a little bit more.
DONVAN: We're looking for a pinata. You're not giving us one. But I want to thank you Charles Lane, a columnist with The Washington Post, for presenting your argument that gas prices should not be blamed on the president when they're high, or low gas prices should not be credited to the president. It's bigger than that. He's a columnist with The Washington Post. He joined us from studios at the newspaper. And you can find a link to his column at npr.org. Click on TALK OF THE NATION. Charles Lane, thanks very much for joining us.
LANE: I enjoyed it, John. Thank you. Transcript provided by NPR, Copyright NPR.