Obama's Gas Price Migraine
March 4, 2011
Wall Street Journal
By Kimberley A. Strassel

The Obama administration has its share of headaches: a possible government shutdown, Arab unrest, the union uprising. The real migraine may be a firestorm over gasoline prices.

Oil last week topped $100 a barrel, and gas has hit $4 a gallon in pockets of the country. The price is expected to keep heading up. This pain is being felt by a public still dazed by recession.

An immutable fact of expensive gasoline: Americans will find someone to blame. We can expect in coming months to hear many sober analysts attempt to explain the complex reasons for rising oil prices: inflation, Middle East tremors, growing demand. Expect, too, for all those reasons to vanish behind what most Americans will see as the far more obvious (and graspable) cause: President Obama's regulatory assault on domestic oil and gas production.

This is, after all, a White House that has put at the center of its domestic agenda its goal of a "green economy," which hinges on making fossil fuels too expensive for Americans to purchase. In January 2008, candidate Obama told the San Francisco Chronicle that under his cap-and-trade plan, "electricity rates would necessarily skyrocket." Steven Chu, now Secretary of Energy, told this newspaper in the same year: "Somehow, we have to figure out how to boost the price of gasoline to the levels in Europe." That would be, oh, $10 a gallon.

In March of last year, Mr. Obama reversed or scaled back nearly every major offshore oil opportunity that has come about since the price spike of 2008—effectively reimposing a moratorium on drilling off the coasts. His administration has killed leases in developmentally crucial areas of Alaska. His EPA has refused to issue permits. The White House used the BP oil spill as an excuse to also shut down the deep-water Gulf.

Onshore? Interior Secretary Ken Salazar has revoked oil-and-gas leases. The EPA is suffocating the coal industry with regulation. One of the president's only clear State of the Union proposals was to raise taxes on oil and gas. The White House's energy policy, says Dan Kish of the Institute for Energy Research, is "embargoing our own energy supplies to drive up their costs."

Democrats are already desperately spinning the press on why none of this will matter politically. Yes, the party took heat for its antidrilling policies in 2008, but it won't be the same this time. Americans, they say, just witnessed an oil spill; they are okay with a drilling ban. And so long as economic recovery stays on track, no one will sweat an extra buck a gallon. And so on.

The Democrats are right about one thing: It won't be the same as 2008. It will be politically worse. Nobody should forget the extraordinary public fury over $4 gas in 2008. The rage was enough to take Mr. Obama's flailing presidential opponent, John McCain, and propel him ahead in the polls, where he stayed until the financial crisis. Remember also that when oil prices peaked in July 2008, the unemployment rate was 5.7%.

President Bush largely escaped public blame. How could anyone lay high oil prices on a guy the left had spent eight years slamming as an "oil man"? But President Obama's anti-oil record is evident, and Republicans (who, unlike in 2008, run the House), will use their bully pulpit to directly connect prices to the Obama energy freeze.

This week we've seen the first rumblings of the oil-price political freight train that's coming. Senate Minority Leader Mitch McConnell highlighted a Democratic proposal to raise gas prices with new levies on oil and gas, deeming it the "minivan tax." Washington state Rep. Doc Hastings, chairman of the House Natural Resources Committee, grilled Interior Secretary Ken Salazar [Thursday] about the administration's de facto moratorium on deep-water drilling permits. Behind the scenes, GOP members are touching up energy bills, to provide a further contrast with the administration.

The White House sniffs trouble and this week rushed to issue its first Gulf deep-water permit since the spill. Yet the administration has so much wrapped up in its green-energy agenda—stimulus grants, subsidies, programs in every department—it seems unwilling to do more. The EPA has refused to budge on controversial carbon-emissions regulations. The president is now pushing for a "clean energy" mandate, the ugly stepchild of cap and trade. The White House is trying to recruit gullible Republicans to a "comprehensive" energy bill, though its goal appears to be to cloak a further renewable agenda behind the few bones it would toss to natural gas or nuclear.

The administration took a midterm election beating because the public saw it move to the left of reality on spending and health care. Rising gas prices now threaten to catch it out the same way on energy. If it wants to recapture public favor, it will have to make a major shift.

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