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The Claim: President Obama Has Doubled Gasoline Prices

During the Republican primaries, a number of candidates made a claim that at first glance seems improbable: That under President Obama, gasoline prices have doubled. A current advertising campaign by the American Energy Alliance repeats that claim: “Since Obama became president, gas prices have nearly doubled. Tell Obama we can’t afford his failing energy policies.” Let's examine that claim.

A Recent History of Gasoline Prices

We all remember $4/gallon gasoline under President Bush, so how could prices have doubled under President Obama? Let's look at the recent history of retail gasoline prices. Barack Obama was sworn in as president on January 20, 2009. In the week that ended on January 19, 2009, the average weekly retail gasoline price in the U.S. was $1.90/gallon (all prices used here are weekly averages). Most people don't remember that given the recent history of high gasoline prices, but I will get to that.

In May 2011 retail gasoline prices averaged above $4/gallon for three straight weeks. The most recent retail price -- for the week ending September 10, 2012 -- was $3.91/gallon. So prices are more than double what they were when Obama was sworn in. But there is a very big caveat, and without that caveat a very misleading picture is presented.

Bubbles and Overcorrections

In the summer of 2008 -- Bush's last year in office -- gasoline prices climbed above $4/gallon for nine straight weeks on the back of oil prices that reached nearly $150/barrel. But those prices were unsustainable in the short term, and unsurprisingly, they collapsed. By the end of the year, oil prices had retreated into the $30's, and gasoline had fallen back to $1.71/gallon.

But those low prices represented an overcorrection. I noted at the time that I didn't believe prices would stay at those levels for very long, and by the time Obama was inaugurated gasoline prices had already climbed by $0.20/gallon over the three weeks before his inauguration. Gasoline prices would continue to climb as oil prices recovered.

Conclusions: Technically Correct, but Misleading and Incomplete

So the claim of gasoline prices doubling under Obama is technically correct, but irrelevant because the reason it happened was that he came into office near the bottom of a price overcorrection. Blaming Obama for the price rise would be like blaming him for cases of lung cancer that were detected during his term. Energy policies that presidents implement will manifest themselves years down the road because of the lag time in developing projects. We have many historical examples of this. I have noted numerous times that a president has very limited means to impact gasoline prices over the course of their term. If McCain had been elected, you would have seen the same pattern, except in that case the exact same attacks would have come from the left.

Furthermore, I have noted that President Obama will be the first president since LBJ to preside over four straight years of increasing U.S. oil production. Natural gas prices are less than half the levels they were when Obama took office. I know some like to say "He had nothing to do with that." And I agree that Obama's policies did not result in increased domestic oil production, nor the plunge in natural gas prices. But neither did his policies cause the rise in gasoline prices after he took office. You can't blame him for high gasoline prices during his term if you aren't going to credit him for increased oil production or lower natural gas prices. That is, you can't unless you are simply playing partisan politics.

There are substantive discussions to be had about President Obama's energy policies, and how they will impact the U.S. in coming years. Blaming him for high gasoline prices are not part of that substantive discussion.

Link to Original Article: Gasoline Prices Doubled Under Obama: True or False?

By Robert Rapier

For more in-depth, nonpartisan discussions on energy, connect with me on Twitter (@RRapier), LinkedIn, Facebook, or at my R-Squared Energy Column.


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Comment Preferences

  •  let me posit another pov? (4+ / 0-)

    the gas prices are being raised by Exxon and other Republican corporations to make voters mad at the administration just before the election?

    call me crazy?

    It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything. ~~Joseph Stalin

    by SeaTurtle on Sat Sep 15, 2012 at 02:53:40 PM PDT

  •  Quantitative easing and gas prices (3+ / 0-)
    Recommended by:
    Larsstephens, ParkRanger, nomandates
    The Federal Reserve announced a third round of quantitative easing Thursday afternoon, and it is big: A net $40 billion a month in additional purchases of mortgage-backed securities.[...]

    Stocks have rallied, with the major averages up about 1% in mid-afternoon trading. That makes Wall Street happy — but what about Main Street? Ordinary Americans can expect to see higher gasoline prices.

    Knowing that this quantitative easing was coming from the Feds, I can't help but to think that's why Paul Ryan started pushing the gas prices conspiracy theory a few days ago. (Or maybe he really believes this crap.):

    Obama’s ‘Gone to Great Lengths’ to Keep Gas Prices High, Ryan Says

    What’s frustrating about the Obama administration’s policies are they’ve gone to great lengths to make oil and gas more expensive.”

    The average national gas price is $3.82 up from $3.66 just a month ago, according to statistics from the American Automobile Association.

    Gas prices have risen despite the fact that, according to the U.S. Energy Information Association, domestic crude oil production increased from 5.0 million barrels per day in 2008 to 5.5 million barrels per day in 2010.

    That same year marked the first time in 13 years the country imported less than 50 percent of the oil the United States consumed, a trend continued in 2011.

    The choice of our lifetime: Mitt Romney, It Takes A Pillage or President Barack Obama, Forward Together.

    by FiredUpInCA on Sat Sep 15, 2012 at 03:16:01 PM PDT

    •  SPR Option (3+ / 0-)
      Recommended by:
      Larsstephens, ParkRanger, nomandates

      While I think gasoline prices will head down regardless, Obama could temporarily push them down much faster if he goes through with an oil release from the Strategic Petroleum Reserve. (I don't support that option though). But if he did that, Ryan would be screaming the loudest.

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