Part 1: Really! No ‘Silver Bullet’ to Lower Gas Prices?

March 27, 2012

 
 
The Shell station on Deerpath in downtown Lake Forest listed gas at $4.39 for a gallon of regular on Friday.Credit Jim Powers, Editor of Lake Forest Patch
 
 
The first paragraph said it all: “Record-setting heat isn’t the only mark Chicagoland is breaking these days.”

I was further informed to expect gas prices to remain over $4 a gallon all summer and that they may even reach $5 per gallon.

A few days ago when filling up my gas tank at the Lake Forest Shell station, I paid $4.68 a gallon. Perhaps you have noticed that food prices seem to be steadily increasing along with gasoline. 

Food prices are affected by the rise in the price of gasoline, as the added cost factors into the production of food by farmers, transporting food to processing facilities, and then delivering the food products to supermarkets to be sold to the consumer. Each added cost in the food chain process must be figured in to the final cost of a product at the retail level. 

Now let’s go a step further. What happens when many individuals are spending much or all of their discretionary income on filling up at the pump?  Buying at box stores, etc., will decrease, resulting in more layoffs because of slow and limited sales.

The No. 1 question is why President Obama is not feeling the wrath from the American people as did President George W. Bush when gas prices reached $3 a gallon? The American people blamed Bush and called on him to do something about it.

Gasoline was down to $1.85 when President Obama was elected in 2008. Now fast forward four years, and gas is moving locally toward $5 per gallon.

Several days ago on the Don Wade and Roma weekday talk radio program on WLS-AM, I heard John Hofmeister, retired CEO of the Dutch Shell Oil Co. He related how he told President Obama when he first took office that he must do something about the oil situation or the very thing would happen that is now happening, gas prices would soar to $5.00 a gallon.

President Obama continues to say that there is no “silver bullet” to lowering energy prices, that factors beyond his control are contributing to the steep rise in the price of gasoline.

When pressed about more drilling as a remedy for lowering the price of gasoline at the pump, Obama insists that drilling for more oil won’t affect the price of gasoline, and how there aren’t enough oil reserves in the U.S. to satisfy our growing energy needs. 

In an opinion piece by Charles Krauthammer in the Chicago Tribune on March 20 — “Seaweed in your gas tank?” — Krauthammer asserts that President Obama’s retort that drilling is not a means to lower gas prices is based on his distain for oil and his love affair with green sources of energy. 

Krauthammer goes on to claify his claim: 1) There is no drilling happening off the Mid-Atlantic coast as Virginia wishes to do. 2) Off the broader Gulf of Mexico drilling in 2012 is expected to drop 30 percent below pre-moratorium forecasts. 3) In the Arctic National Wildlife Preserve more than half the size of England, the drilling footprint would be the size of the Dulles Airport. 4) On federal lands in the Rockies, leases are down 70 percent since Obama took office.  If more oil in the marketplace is of no consequence, why then have past presidents, including Obama, asked OPEC countries, and especially Saudi Arabia, to pump more oil to help stabilize gas prices if the amount of available oil is of no consequence?

Also, why is Obama thinking of releasing oil from this nation’s strategic reserve if flooding the market with more oil wouldn’t lower the price of gas in the long term and would do very little in the short term.   

As President Obama moves closer to an unprecedented second release of the emergency oil stockpile in a bid to bring down near-record fuel prices, experts say dramatic logistical upheavals in the oil market over the past year may now make such a more slower and more complicated.

The mechanics of the release may prove almost as tricky for Obama as rallying international support for a second intervention in as many years, or fending off attacks from Republicans who will likely brand it as a pre-election gimmick.   

Part 2: Really! No ‘Silver Bullet’ to Lower Gas Prices? (Obama claims oil is part of Energy Policy)

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