Congress, The President, and The Myth of Gas Price Control

The outlet This Week features an article by former White House reporter PaulBrandus (“Why You’re Wrong About Gas Prices And Politics”) that addresses some popularly held myths. Two deserve comment because they create myths about myths.

The first myth deals with one about how much power presidents have over gas prices. Brandus rightly makes the point that crude oil prices are set on the world market and that gasoline prices have been rising since the early 2000s, well before President Obama took office. In the short run, Brandus is right that there is little a president can do to reduce prices. But he is wrong from a longer term perspective. Presidents and Congress can do a lot for our future energy costs if they choose to act now. In the early 2000s, Congress failed to increase the areas open to exploration. And now the President is following suit—comments to the contrary notwithstanding.

If the U.S. had been more aggressive over the past 10 years we could be producing over one million additional barrels of oil a day and on our way to hitting the 2 million mark. Increased production on that scale would have partially offset the reduction in global spare capacity and changed the expectations of oil speculators. (Without oil speculation—which has grown dramatically in recent years—the price of crude would $60-70 a barrel according to ExxonMobil’s CEO.) Both actions would depress crude oil prices.

It is a myth to think that Presidents and Congress can’t take actions to lower pump prices.

The myth that “renewable energy is a joke” is the second point Brandus uses to perpetuate another myth. Most opposition on this issue is not directed atrenewables themselves, it’s focused on subsidies that enrich some by taking tax dollars to promote energy that is not commercially viable.

Brandus cites Scotland and Brazil to make a case for renewables. Bad examples! Scotland’s unique size and location make it suitable for using wind power. Where wind is cheaper than other forms of energy, it should be used. In the case of Brazil, he claims that renewables provide 89% of Brazil’s energy, mainly hydroelectric and ethanol—a statistic that is just plain wrong. Hydroelectric, which environmentalists oppose, provides 29% according to EIA and renewables another 21%.

Brazil invested heavily in ethanol in the 1970s and early ‘80s and most of its vehicles are flex fuel vehicles. Ethanol makes up only about 14% of Brazil’s transportation fuel with gasoline providing the rest. Brazil is well on its way to becoming energy independent but it’s not through renewables. It is by aggressively developing its own oil reserves. There is a lesson there.

Mr. Brandus quotes John Adams observation about facts being stubborn. He is right and needs to pay closer attention to them.

This article appeared in the FuelFix weblog on April 11, 2012 at

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