Video: Who gets the blame for high gas prices?

Over the weekend, Barack Obama attempted to lay the problem of high gas prices at the pump at the feet of Big Oil. In his weekly address, Obama blamed “speculators” and scolded oil companies for taking $4 billion in “subsidies” while gas prices spiral out of control:

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On Thursday, my Attorney General also launched a task force with just one job: rooting out cases of fraud or manipulation in the oil markets that might affect gas prices, including any illegal activity by traders and speculators. We’re going to make sure that no one is taking advantage of the American people for their own short-term gain. And another step we need to take is to finally end the $4 billion in taxpayer subsidies we give to the oil and gas companies each year. That’s $4 billion of your money going to these companies when they’re making record profits and you’re paying near record prices at the pump. It has to stop.

Instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in clean, renewable energy. In the long term, that’s the answer. That’s the key to helping families at the pump and reducing our dependence on foreign oil. We can see that promise already. Thanks to an historic agreement we secured with all the major auto companies, we’re raising the fuel economy of cars and trucks in America, using hybrid technology and other advances. As a result, if you buy a new car in the next few years, the better gas mileage is going to save you about $3,000 at the pump.

In other words, it’s somehow the fault of the oil companies for taking the “subsidies” (more accurately, tax breaks on exploration and extraction) while having to buy oil at the market price. At the same time Obama tells us that the subsidy mentality has to stop, he demands even more subsidies for energy resources that have been floated by government money for decades while failing to reliably produce on a large scale, or even unreliably on a large scale.

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If we want to consider tax breaks as subsidies — which is not unfair to do — and argue for more subsidies, then let’s consider which subsidies make the most sense. This chart from Reason TV shows which energy subsidies are most efficient at actual energy production:

Better yet, why are we subsidizing any of this at all? John Shadegg asks the same question today on Fox News:

Ending the subsidies, as Obama demands, would have the short-term effect of raising prices at the pump, not lowering them. His argument is as incoherent as it is hypocritical, but it does highlight the over-involvement government has in energy production altogether. If Obama wants to get rid of tax breaks in the corporate tax code, then let’s get rid of all of them — and get rid of the “investments” that hide the true costs and lack of capacity in highly-subsidized renewable energy sources. At the same time, end the permitoriums and malicious red tape that restrains exploration, extraction, and refining of American energy resources. Not only will that raise tax revenues, it will spark an economic boom and restore investor confidence in America once again.

Update: The Media Research Center notes that only 1% of the national media’s stories on rising oil prices have mentioned Obama’s permitorium in the Gulf:

On April 20, 2010, a horrific oil spill took place in the Gulf of Mexico on British Petroleum’s (BP) Deepwater Horizon rig. Since that day, gas prices have risen nearly $1-a-gallon to $3.83 per gallon. President Barack Obama’s anti-oil policies, including a drilling moratorium are at least part of the reason for that dramatic spike. But you will rarely hear that from the mainstream media.

It certainly isn’t the story the network evening news shows have told their viewers since the oil spill. Out of 280 oil price stories since the disastrous pill, just 1 percent (3 out of 280) mentioned any connection between Obama’s anti-oil efforts, such as the drilling moratorium, and rapidly rising gas prices.

Instead of asking whether Obama’s anti-oil policies could be increasing the cost of gas, the networks blamed other factors such as Mideast turmoil or the “money game” played by speculators. Certainly, the turmoil in Libya, Egypt and surrounding nations has increased worries about oil production and can influence the price. But the networks also should have looked for explanations much closer to home.

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Well, let’s just call this the media’s subsidy for Barack Obama.

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John Stossel 12:00 AM | April 24, 2024
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