Cennamology Chief Editor
A family friend of mine emailed me the photo currently attached to this article, showing gas prices as what they were the day Obama took office. I'll admit, the owners of that particular Exxon station are clever, and the sign certainly draws a chuckle, but the link between President Obama and the currently high gas prices is flimsy at best.
In fact, the reason gas prices were so low when Obama took office is because the economy was in the worst it has been in my lifetime. In times of economic turmoil, gas prices tend to go down because less people are buying gasoline, which depresses the demand. If the owners of this Exxon station remembered correctly, it was under Bush's watch where gasoline reached over $4 a gallon. Gasoline was sold at that price before the great economic collapse of 2007-08. When the collapse came, the prices plummeted to under $2 a gallon over the course of just a few months, only to go back up again as the economy is slowly but surely recovering under Obama.
Despite this, Republicans' selective memories want to forget that gasoline hit $4 a gallon under Bush, higher than it has ever been under Obama. Even if they do remember, Bush is absolved from any responsibility for those high prices because he is a Republican. However, when gasoline gets expensive under Obama, Republicans are immediately blaming him.
The president does not set the prices for gasoline, the market does. Obama cannot issue an executive order demanding oil companies lower the prices of the gasoline they sell.
Many Republicans blame Obama for high gas prices because he is blocking construction of the Keystone XL Pipeline, blocking drilling in the Arctic National Wildlife Refuge (ANWR), and limiting offshore drilling in light of the aftermath of the BP Deepwater Horizon oil spill of 2010. Essentially, Obama does not buy into the "drill, baby, drill" nonsense, and because of that Republicans are trying to pin the responsibility of high gas prices on him.
As usual, the research does not back up the Republicans' claims. According to a study from the University of Michigan, even if Obama opens up every single potential drilling opportunity in the United States, it would have the effect of lowering gas prices by, at most, a nickel. You may claim that the "nickel" adds up, but any savings there would be offset by the heavy tolls destruction to our natural habitats that expanded drilling will cause. In my opinion, if I had to choose between paying an extra nickel for every gallon I put in my car and having another oil spill in the gulf, I will gladly give Exxon my round carving of Thomas Jefferson.
The Keystone Pipeline, if built, will not lower energy prices to the point at where the environmental damages it would cause would be worth it. We have seen this story before. When the Alaskan pipeline was built a few decades ago, it did affect gas prices, but not in the way you might think. Gas prices actually started to increase after the Alaskan pipeline was built because we shipped most of the oil obtained from that pipeline overseas.
Why didn't we keep most of it in America? So much for ending our dependence on foreign oil.
Higher gas prices are not as much of a political issue as they are an economics issue. As was mentioned earlier, the global marketplace sets the price of oil. The price of oil, like the price of any other product, is all based on supply and demand. As the world's population keeps growing, and the number of people of the world living a middle class lifestyle keeps growing as well, the demand for oil will just go up.
According to Thomas Friedman in his book Hot, Flat, and Crowded, as the "global middle class," expands as more people in developing countries move up the economic latter as their country develops, rising gas prices are an inevitable consequence. Because of this, Friedman questions whether or not Americans can afford billions of people in China, India, and other up and coming societies living our lifestyle. The developing countries of the world, many of whom are our competitors, still want to be America. The leaders of China, India, etc. want their people to live as comfortably as Americans do, and this can only be done by using more and more fossil fuels. A person in Beijing two decades ago was more likely to bike to work than to own a car. That is no longer true, as more and more people have joined China's middle class.
The expansion of the global middle class is a very crucial reason as to why transition to renewable energy sources is a requirement for a truly sustainable future. We can keep drilling all we want, but as more people around the world start to live like us, any effects on price that the new extractions have will only be offset by the growing demand. Only when America, which is still a model for the world, leads the way in the transition to renewables, global demand for oil and petroleum will be eased. That's just the way the world works.
If American politicians attempt to set an artificial price on oil that goes against the global market, other oil producing countries will be furious with us because it will force the global market for gasoline out of equilibrium, and more and more people in the expanding global middle class will keep chewing up more and more oil, accelerating the depletion of our fossil fuel reserves.
Just like any other commodity, gasoline runs on supply and demand - with higher demand meaning higher prices. So, if Obama or Congress were to impose a price ceiling on gasoline (the only way he could theoretically manipulate gasoline prices to a point at which it is noticeable) there would be inefficiencies in the market because the demand for gasoline would exceed the supply. Not only that, manipulating gasoline prices to artificially low rates would increase demand and deplete supply of our nonrenewable energy sources even more, as we would see more gas guzzling vehicles like the Hummer out on the road again. People in America and all over the world would be less concerned about efficiency and more concerned about luxury.
According to the Department of Energy, the United States consumes about 20 million barrels of oil per day and 180 million gallons of gasoline per day. Finding alternative sources of energy is imperative if we expect to keep living the way we do now. Also, increasing competition from China and India for oil will keep driving up both demand and prices at the pump. China is also using more oil than ever before, which is also something Obama obviously has no control over.
Gas prices are increasing because of a growing global middle class adopting an "Americanized" lifestyle, driving up global oil consumption at a very alarming rate. Clean and alternative energy sources need to be invested in if we Americans want to sustain our way of living in an affordable manner.Wind, solar, hydro, nuclear, and other sources are the world's only hope in driving down demand for petroleum.
So instead of showing what their station's gas prices were the day Obama took office, perhaps the owners of the Exxon station pictured with this post should instead display what their prices were the day when the world population hit 4 billion people. We are over 7 billion today. That is one thing you cannot blame Obama for.