Mike Lee, Utah Senator, Warns President Obama's Reelection Means $6.60 Gas While Experts Scoff
WASHINGTON -- Republicans hit the accelerator on Wednesday with their charges that President Barack Obama is to blame for high gas prices, with one senator making the extreme claim that the president's reelection will push costs to $6.60 a gallon.
“When President Obama took office, gas prices were about $1.85 per gallon," said Sen. Mike Lee (R-Utah). "Now that they're up to about $3.75 per gallon, we can see a steady increase. Over this 38-month period of time of his presidency so far, gasoline prices have risen on ... average of about 5 cents per gallon per month."
"This is staggering when you think about the fact that if he's reelected," Lee said, "it's a total of an additional 58 months. With that increase, gas prices will be up at around $6.60 per gallon."
Experts have said that $5-a-gallon gas is an apocalyptic price level that is extremely unlikely to be seen.
They are even less impressed with Lee's estimate.
"It's a shameless, irresponsible statement," said Fadel Gheit, an oil and gas analyst at Oppenheimer and Co. "I've been in the oil business 30 years, and I've never heard his name since he became an oil expert."
Gheit explained that about 75 percent of the price of gasoline comes from the price of oil, and the price of oil is skyrocketing because of speculation and fears about the possibility of war spreading in the Middle East.
About the only way that prices could spike as high as Lee has estimated would be if the United States attacked Iran soon.
"All this war talk is putting a 30 percent higher price on oil," Gheit said. "One third of the oil price right now is totally unjustified. The more war talk, the more we're going to pay at the pump."
"Everyone is saying bomb bomb bomb Iran. Let's do that if you're prepared to pay $6 a gallon," Gheit added. "Bombing Iran will give us $6 next summer. We don't have to wait for the election. We can do it sooner."
While Lee's prediction was the most dramatic comment, he is just the latest Republican to blame Obama for high gas prices, saying that they're the result of the United States not producing enough oil on public lands.
Senate Minority Leader Mitch McConnell (R-Ky.) made the same argument on the Senate floor just minutes before Lee, adding the extra dig that Obama wants gas prices high, in spite of the president's assurance on Tuesday that no commander in chief wants high gas prices in an election year.
"When it comes to the rising cost of gas at the pump, it’s my view that the administration’s policies are actually designed to bring about higher gas prices," McConnell declared, asserting that the "burdensome" regulations restrictions on drilling and the recent rejection of the Keystone XL oil pipeline from Canada are to blame for high prices.
McConnell did not mention global unrest or speculation, as did oil analyst Gheit.
"If we stopped speculation, tomorrow we would pay 50 cents a gallon less at the pump," Gheit said, adding that if the uncertainty over Iran were removed, the price of oil would be around $80, with correspondingly lower gasoline prices.
Drilling more would do nothing, however.
"We've been increasing our oil production for five years," Gheit said. "The industry has been doing a very good job," he added, agreeing with McConnell that the president should not claim credit for increased supplies.
Still, extracting even more would not affect price at the pump "one iota," Gheit said, explaining that oil is traded on an international market and that even if war fears and speculation were not issues, OPEC still can change price.
"The easiest thing for OPEC is to reduce production," Gheit said. "They would rather cut production by 5 percent than lose 20 percent of the price."
He also pointed to another factor affecting price that McConnell and Lee ignored -- a cut in gasoline refining capacity by oil companies.
"We shut down three refineries in the last three months -- 710,000 barrels a day are gone, evaporated," he said, by way of explaining why gas prices have risen even as demand has fallen.
Gheit's opinions are hardly unique. At a recent hearing of the Senate Energy and Natural Resources Committee, on which Lee serves, James Burkhard, the director of the Global Oil Group at IHS CERA, decribed how the U.S. oil production has seen a "great revival" since 2008, with oil production higher in 2011 by some 1.4 million barrels a day.
Numerous media reports, including those by WSLS after and Washington Post have debunked claims that prices can be lowered by getting more crude from the United States.
And other experts have told The Huffington Post in the past that if nearly all restrictions were relaxed on U.S. drilling, it might have a modest impact on prices in about five years because the United States does not have a large enough supply to quickly affect prices of the commodity.
Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.
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First Posted: 03/ 7/2012 2:53 pm Updated: 03/ 7/2012 4:12 pm