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Rising gas prices have put a damper on President Obama’s political fortunes—54 percent of the respondents to a new CBS-New York Times poll said they believe the president can do a lot to control prices at the pump. And nearly two-thirds of the respondents to an ABC-Washington Post poll saidthey disapprove of how Obama is handling the issue. It’s perhaps not surprising that Obama saw sharp drops in his overall approval rating in both polls.
Political rhetoric aside, how much can the president really do to control gas prices? Not all that much. The major cause of the recent spike—gas rose to $3.80 a gallon this week—is the increasing tension with Iran, most analysts say. That’s making traders nervous about a possible conflict in a crucial oil-producing region, which could have the effect of cutting off a significant source of the world’s oil. In addition, Japan has been using much more oil since shutting down virtually all of its nuclear power plants in the wake of the Fukushima disaster last year. And various conflicts in Sudan, Yemen, Syria and Libya have choked off some production in those countries.
Republicans say opening up the United States to more domestic drilling would bring prices down. Newt Gingrich has been hammering on that theme lately in his quest for the Republican presidential nomination, saying he has a plan to reduce gas to $2.50 a gallon. But American consumers are part of a global market for oil, and crude oil accounts for about three-quarters of the cost of a gallon of gas, according to the Energy Information Administration. So increasing domestic production wouldn’t do much to ease prices. Not to mention, it would take years to come to market and start bringing prices down even marginally.
President Obama could tap the Strategic Petroleum Reserve, as was done during the first Iraq war in 1991, after Hurricane Katrina damaged refining facilities in 2005, and by President Obama during Libya’s civil war last year. But this has generally been done as a temporary measure in response to one-off supply disruptions, not as a policy response to rising prices. Indeed, experts say the impact on prices has generally been only temporary.
All of this sounds like bad news for President Obama—but here’s something that might give the White House more reason for optimism: Despite what voters say, there’s not much evidence that oil or gas prices on their own are a significant factor in determining presidential elections, according to Nate Silver, the New York Times’ statistical guru.
Still, prices at the pump don’t exist in isolation. The fear is that they could put a crimp in the economic recovery, by leaving Americans with less money in their pockets and thereby slowing down consumer spending. If that happened, voters would almost certainly blame Obama.
Kimberley Vassal Insurance Services, LTD. 