In a press briefing last week, White House spokesman Josh Earnest argued that there is no magical solution for rising gas prices.
“If somebody is going to promise that they can wave a magic wand or sprinkle the pixie dust or plant the beans in the right place so that we can get out of this problem, they’re just not being straight with you, and they’re not being straight with the American people,” Earnest told reporters, staying mum on whether President Obama will dip into the nation’s Strategic Petroleum Reserve in response to high and rising fuel prices.
But nearly half of National Journal’s Energy and Environment Insiders think Obama will do just that.
The ongoing gas-price fight between Republicans and the Obama administration will only escalate as the summer months near and the presidential election approaches. Gas prices haven’t reached their zenith, but the blows are already being exchanged daily. First Republicans slam Obama on gas prices, then he returns the favor.
Last week, Obama chided Republicans for using the high prices as a campaign tool and argued, much like his spokesman, that “there are no quick fixes to this problem.” Still, GOP lawmakers and candidates blamed Obama for allowing prices to double during his time in office and offered up more domestic production and the Keystone XL pipeline as potential solutions, while Democrats urged Obama to once again tap the strategic reserve.
Forty-six percent of Insiders say Obama will dip into the emergency reserve, arguing that he needs to do something “just to show he cares.”
“It is the only thing the president can actually do that looks like he is doing something,” said one Insider.
Obama already tapped the Strategic Petroleum Reserve last June, in coordination with the International Energy Agency, to offset the disruption in the oil supply caused by unrest in the Middle East.
It was only the third time the United States has tapped the emergency oil reserve since its creation in 1975. The first President Bush authorized an emergency release during the first Gulf War in 1991, and the second President Bush released 11 million barrels in 2005 after Hurricane Katrina.
While most Insiders predicted that this will be Obama’s reaction to rising gas prices, many cautioned that it still isn’t a good idea.
“The word ‘strategic’ in the Strategic Petroleum Reserve was not supposed to denote electoral strategy,” warned one Insider.
Some Insiders looked to other potential administrative actions—12 percent said Obama would crack down on Wall Street speculators and another 12 percent said the president would open up more domestic oil production, while 6 percent said he would do nothing.
Meanwhile, 24 percent of Insiders suggested other actions may come from the Obama administration in reaction to the high prices. Among those, Insiders suggested Obama would continue to place the emphasis on tax breaks for the oil and gas industry, continue talking about how there is not much the U.S. can do to reduce prices, or push forward with alternative energy solutions.
A majority of Insiders agreed that unrest in the Middle East is the biggest factor affecting gas prices; about one in five cited growing worldwide demand.
"The continued threat from Iran to shut down oil exports of its own or other nations in the Persian Gulf, or the outbreak of war between Iran and Israel, will drive oil prices higher," one Insider said.
"It's about the perceived tightness in the global market," said another Insider. "In the near term, political instability and global demand are what is shaping the short-term price. Domestic production, increased fuel economy, and alternative fuels don't impact the immediate price fluctuations, but they can suppress future price shocks and insulate against energy insecurity."
Other factors cited by Insiders as affecting oil prices included Wall Street speculation and uncertainty about European economies.
What will Obama do in reaction to high gas prices?
- Tap into the Strategic Petroleum Reserve 46%
- Crack down on Wall Street speculators 12%
- Open up more domestic oil production 12%
- Nothing 6%
- Other (please specify) 24%
Tap into the Strategic Petroleum Reserve
“The predictable, popular, totally ineffective, and conventional Democratic response is to tap the SPR—and that is exactly what the president will do.”
“I believe the president will tap the SPR, and his move will be exposed as crass politics ignoring important security issues. The word ‘strategic’ in the Strategic Petroleum Reserve was not supposed to denote electoral strategy.”
“It is a stupid idea, but it is the only thing the president can actually do that looks like he is doing something. It is a bad idea, though.”
“Obama knows it will do nothing to lower the price of gasoline, but it’s the only thing he can actually do without help from Congress and the only ‘solution’ that won’t upset his friends at the Center for American Progress.”
“He will need to do something just to show he cares, and he has already shown himself willing to tap into the SPR. In addition, he will probably rail against Wall Street speculators, but I don’t think he has any legal means of ‘cracking down’ on them.”
“The SPR was never intended as a price control, too, but Democrats can’t resist tapping it.”
“He may call for an investigation into trading and speculation, but the key component of his short-term plan will be an SPR release.”
This article appears in the February 29, 2012 edition of NJ Daily.