With Gas Prices Expected To Drop Below $3, Republicans Suddenly Silent On Obama’s Role

By Rebecca Leber/Think Progress

Experts predict average gas prices may fall below $3 this fall after dropping 14 centsin two weeks. When prices hit a record high, Republicans attributed sole responsibility to President Obama, even though there isno evidence that factors like drilling impact what consumers pay.

Just two months ago, Republicans said Obama shouldered the blame for rising gas costs, and that only he had the “key” to lower gas prices:

Mitt Romney, March 18, 2012: “He gets full credit or blame for what’s happened in this economy, and what’s happened to gasoline prices under his watch, and what’s happened to our schools, and what’s happened to our military forces. All these things are his responsibility while he’s president.”

House Speaker John Boehner (R-OH), April 6, 2012: “The president holds the key to addressing the pain Ohioans are feeling at the gas pump and moving our nation away from its reliance on foreign energy. My question for the president is: what are you waiting for?”

Boehner, April 6, 2012: “The president’s own policies to date have made matters worse and driven up gas prices.”

Senate Minority Leader Mitch McConnell (R-KY), Feb. 28 2012: “This President will go to any length to drive up gas prices and pave the way for his ideological agenda.”

Sen. John Barrasso (R-WY), March 13, 2012: Obama is “fully responsible for what the American public is paying for gasoline.”

Are Republicans now reversing their rhetoric and giving Obama credit for falling gas prices? Of course not.

Former Virginia Sen. George Allen, who is running to reclaim his old seat, is another lawmaker who has misled on the gas prices. Last month, ThinkProgress reported that Allen is pushing a graphic that not only compares gas prices to an artificially low amount, but lists a “current” price from April, even though Virginia gas prices are now more than 40 cents lower per gallon.

Obama’s policies haven’t changed since April: the Keystone XL pipeline has not been built, drilling hasn’t drastically changed, and the same regulations are in place. Yet gas prices have fallen. Economics says he isn’t responsible, either way.

VIDEO: Fox's Gas Price Predictions Fall Flat

by Jill Fitzsimmons/Media Matters

In its relentless coverage of rising gas prices, Fox News made some outrageous predictions of $5, $6, $7 and even $8 a gallon gasoline by summer. But these predictions have proven to be nothing more than wishful thinking by a network that hoped to use high prices at the pump as a campaign issue against President Obama.

Although experts agree that U.S. policies have little impact on the global oil market, Fox spent monthspushing the narrative that rising prices at the pump were a direct result of President Obama's drilling policies. Rather than pointing out the root of the problem -- that our dependence on oil makes us vulnerable to supply disruptions and volatile prices -- Fox blamed EPA regulations and falsely suggested that the Keystone XL pipeline and expanded domestic drilling could solve our gas price woes.

In line with GOP messaging strategy, Fox anchors hyped rising gas prices as an "opportunity to disrupt" a positive economic narrative and perhaps even "de-rail" President Obama's re-election. Fox's energy "expert" Eric Bolling went so far as to declare that high gas prices "will take down the presidency."

But as oil analyst Tom Kloza anticipated, Fox's astronomical predictions have turned out to be "nonsense."

Since peaking in early April, the price of gasoline has steadily declined. Over Memorial Day weekend, which marks the start of the summer driving season, the national average was $3.67 a gallon --  less than this time last year. And analysts expect prices will continue to drop this summer as a result ofeasing tensions in the Middle East, rising domestic production and decreasing global demand.

These market factors were largely overlooked by Fox's talking heads as they blamed President Obama for rising gas prices. But now that prices are falling, Fox has changed its tune. Stuart Varney summarized Fox's contradictory narratives, saying:

STUART VARNEY: [Obama] has had nothing to do with bringing the gas price down the last few days. He's had everything to do with pushing the gas price up over the last three years.

And in an attempt to spin lower prices as more bad news for the President, Fox is claiming that they could be a sign of a "looming global economic crisis."

Media Goes Silent as Gas Prices Fall After Obama Crack Down On Oil Speculation

By: Jason Easley/Politicususa

The media and the Republicans were happy to blame President Obama for the high price of gasoline in March, but they are giving Obama none of the credit for the drop in gas prices today.

It seems like only yesterday that the GOP and their corporate media lackeys were telling us that gas prices would ruin Obama, but they have gone silent as gas prices have fallen since Obama announced his administration’s crackdown on oil speculation.

As recently as last month, Mitt Romney was still blaming President Obama for the price of gas, “He gets full credit or blame for what’s happened to this economy and what’s happened to gasoline prices under his watch and what’s happened to our schools and what’s happened to our military forces — all these things are his responsibility while he’s president.”

Speaker of the House John Boehner went as far as to claim that gas prices could cost Obama the election, “But if the economy doesn’t get better, I don’t think he’ll win. If people don’t feel better about government-run health care, I don’t think he’ll win. And if gas prices are $5 or $6, he certainly isn’t going to win.”

The media was happy to give the Republicans a free forum and plenty of airtime to use to blame Obama for gas prices, but on April 17 Obama called for a crackdown on oil speculation, “We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher, only to flip the oil for a quick profit. We can’t afford the situation where some speculators can reap millions (of dollars in profits), while millions of American families get the short end of the stick. That’s not the way the market should work.”

Since Obama announced his crackdown on oil speculation, gas prices have fallen twelve cents a gallon. The media response to this news has been total silence. (I guess if Republicans don’t have anything to say then there is nothing for the corporate media to report).

There are a couple of other factors at play that have also driven the price of gas down. Speculators had been running wild in February and March. They were betting that war with Iran was on horizon. When Israel or the international community did not take any military action against Iran, prices decreased. The other shoe to drop was that savvy U.S. drivers quickly decreased their consumption. When prices got too high, people started driving less. People have more fuel efficient vehicles that need less fuel. The hybrid has replaced the gas guzzling SUV as America’s car of choice. Better technology has made it easier for consumers to fight back against price gouging and speculation.

It is impossible to say whether President Obama’s announcement of a crackdown on speculators lowered gas prices on its own, or whether it was the president’s announcement and a combination of other factors, but if Obama was to blame for price increase, using the same logic, he also deserves credit for the price decrease.

Republicans try to blame President Obama for everything every day, but the media happily and unquestioningly acts a megaphone for the right’s talking points. The media amplified Republican blame of Obama for gas prices, but they have never given Obama credit since gas prices have fallen.

The media’s ability to skip the good along with their enthusiasm for reporting the bad when it comes to this president is one of the reasons why conservative media bias is so obvious to many Americans. There is a reason why Pew has consistently found that President Obama gets the most negative media coverage of any 2012 candidate.

Time and time again during the Obama presidency, we have seen the media behave in ways that debunk the liberal bias myth. Conservatives continue to tout their liberal bias cover story, all the while keeping the American people in the dark about who controls their media, and whose bias they really represent.

The Charts That Prove Obama Doesn’t Set Gas Prices

By Joe Romm/Think Progress

America produces 200 times as much oil as Germany, but our gas prices rise and fall in tandem (we pay far lower gas taxes). Source:  Energy Information Administration and NY Times.

The public understands Obama isn’t to blame for high gasoline prices, as recent polls make clear. Even the Wall Street Journal and Cato Institute agree: “It’s not Obama’s fault that crude oil prices have increased.”

But as the NY Times pointed out Sunday, facts don’t stop the GOP:

The issue of gas prices has not only been misunderstood but thoroughly distorted by relentless ideological spin from industry and its political allies, mainly Republican. Hardly a day goes by that some industry cheerleader somewhere — be it Gov. Bobby Jindal of Louisiana or Senator James Inhofe of Oklahoma — does not flay President Obama for driving up oil prices by denying the industry access to oil and gas deposits and imposing ruinous environmental rules. Senator John Barrasso, a Wyoming Republican, said last week that Mr. Obama should be held “fully responsible for what the American public is paying for gasoline.”

The Times put together some great charts using EIA data. They make clear 1) oil prices are set on a global market and 2) the strategy of “Drill, Baby, Drill” adopted by the GOP and President Obama has succeeded at increasing production and decreasing dependency on foreign oil — but it has unsurprisingly failed at affecting global markets.

In 2005, oil imports accounted for nearly 60 percent of America’s daily consumption. In 2010, for the first time in recent memory, imports were less than half of consumption, and last year, imports were only 45% — 8.6 million barrels a day of the 19 million consumed. Source: EIA

This is no surprise to anyone who follows oil market analysis. In fact, back in 2009, the U.S. Energy Information Administration’s issued a report that examined the difference between full offshore drilling and continued restrictions. In 2020, there is no impact on gasoline prices. In 2030, US gasoline prices would be three cents a gallon lower.  Woohoo!

The bottom line is clear, as the NY Times points out:

With developing countries like China and India demanding more petroleum, prices are likely to stay high. That’s reality — no matter what the Republican spinners say. Only a rounded policy mix of greater fuel efficiency, steady production and the aggressive development of alternative fuels can protect American consumers against what could be even greater price shocks in the years ahead.

Sen. Bingaman (D-NM) made this same point in a major presentation last year: “We become less vulnerable by using less oil.” Grist has a great new chart from Bingaman:

We’re not going to substantially change U.S. gasoline prices through more drilling and more domestic production. We can protect ourselves and our economy from rising prices and oil shocks — and, of course, catastrophic climate change — only by reducing oil consumption.

FLASHBACK: Fox News On Gas Prices In 2008

by Shauna Theel/Media Matters

Following GOP strategy, Fox News is again blaming the Obama administration for rising gasoline prices -- a claim that has been repeatedly debunked by energy analysts. But back in the summer of 2008, when the average U.S. gasoline price hit a record high of $4.11, Fox said that "no President has the power to increase or to lower gas prices."

In 2008, Fox's coverage occasionally even mirrored the facts: expanding domestic oil drilling will notsignificantly lower prices, and the only way to reduce our vulnerability to gas price spikes is to use less oil. Perhaps there was more room for reality-based coverage at Fox when there wasn't an incumbent president to defeat?

In case you missed it, here's how Fox is covering gas prices now:

Obama: America can't drill its way to lower gas prices

Visit msnbc.com for breaking news, world news, and news about the economy

Blame Oil Speculators, Not Obama, For Rising Oil Prices

By Alex Seitz-Wald/Think Progress

As the improving economy has robbed conservatives of their chief talking point against President Obama, they’ve turned to rising gas prices as the next problem to pin on the president.

Speaker John Boehner (R-OH) “instructed fellow Republicans to embrace the gas-pump anger,” while Rick Santorum conspiratorially claimed Obama is intentionally pushing up prices to cut carbon emissions. Not to be outdone, Newt Gingrich released a 30-minute video today about how “the Obama administration is so anti‑oil” that they’ve forced the price of gas to go up.

But there’s little truth to claims that Obama has curbed U.S. oil production and driven up gas prices in the process. As NPR noted this morning, the number of drilling rigs in U.S. oil fields has quadrupled under Obama and domestic oil production hit an 8-year high in 2011. For the first time in 60 years, the U.S. is now a net fuel exporter.

Oil demand was actually down 4.6 percent last week over last year, while the supply of gasoline has actually increased slightly since a year ago. So why are gas prices so high? As McClatchy’s Kevin Hall explains today, there is a systemic problem: speculation.

Energy futures markets serve a legitimate role in helping producers (like oil companies) and big end users (like airlines) hedge against price volatility, but lately, they’ve been taken over by Wall Street speculators who never intend to actually use the fuel they’re betting on. As Hallreports:

Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.

A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14 while speculators who will never take delivery of the oil made up 64 percent.

Many experts, lawmakers (Democratic and Republican), and government regulators have expressed similar warnings.

Finally, after many delays, the government board responsible for regulating commodity futures markets finalized a rule in October to limit speculation, a power it was given by the Dodd-Frank Wall street reform law. However, the rule won’t go into effect until next October, as the Commodity Futures Trading Commission (CFTC) needs to collect “one year of interest data” first. The financial industry is fighting the new rule, but just today, the CFTC took action against a company in different market, providing an example of how the energy regulation can effectively work.

Fox Still Struggling With Basic Chart Concepts: Gas Price Edition

by Shauna Theel/Media Matters

In a segment falsely blaming Obama for rising gasoline prices, Fox News' America's Newsroom aired the following chart yesterday. It shows three data points -- including the vague "last year" -- plotted nonsensically on the x-axis:

"Last year" refers to gas prices last February; Fox's chart omitted what happened in the 13 months between February 2011 and last week. Here's how Fox's source, AAA, displays the data (green line):

Conservative Media Defend Tax Breaks For Big Oil With False Claim About Gas Prices

From Media Matters:

Conservative media claim that recent proposals to repeal tax breaks for the five largest oil companies will "make gasoline more expensive." However, energy experts say that cutting the tax incentives will have little to no effect on prices at the pump.

EMBED

Conservative Media Claim Cutting Subsidies Will "Make Gasoline More Expensive"

WSJ's Moore: "The Price Of Gasoline And Oil Is Going To Go Up." From the May 10 edition of Fox News' Happening Now:

STEPHEN MOORE: The problem I have with though, this circles back to the whole issue of when we pay for gasoline at the pump. If you raise the taxes on gasoline and oil, the price of gasoline and oil isn't going to go down. The price of gasoline and oil is going to go up. [Fox News, Happening Now, 5/10/11]

Wash. Examiner: "More Likely, The Obama-Reid Program Will Make Gasoline More Expensive." From a May 9 Washington Examiner editorial:

At best, Reid's approach will do absolutely nothing to take the pressure off the wallet of American families. More likely, the Obama-Reid program will make gasoline more expensive. By discouraging U.S. oil production, Obama and Reid will force American consumers to be even more dependent on foreign sources like OPEC and Venezuela's Hugo Chavez. This in turn will hinder the economy from creating new jobs to ease the 9 percent unemployment rate. [Washington Examiner, 5/9/11]

Beck: "If You Cut The Subsidies," Then "Your Price Is Going To Go Up." From the May 10 edition of Glenn Beck's radio show:

BECK: OK, so if you cut the subsidies --

GRAY: It goes up.

BECK: -- then your price is going to go up. So everybody who says let's cut the subsidies to the oil companies, I just want you to understand how that works. That means the price goes up. [Premiere Radio Networks, The Glenn Beck Program, 5/10/11]

Ben Ferguson On Fox: "We're Going To End Up Paying More Because He's Wanting To Go After Their Tax Breaks." From the May 10 edition of Fox News' America Live:

FERGUSON, RADIO HOST: This president is proving that he does not mind these high gas prices and is willing to go only after the oil companies. And guess what? That's going to be passed on to us so we're going to end up paying more because he's wanting to go after their tax breaks. [Fox News, America Live, 5/10/11]

Energy Experts Say Cutting Oil Companies' Tax Breaks Will Have Little Effect On Prices

Borenstein: "The Incremental Change In Production That Might Result From Changing Oil Subsidies Will Have No Impact On World Oil Prices." According to Severin Borenstein, co-director of U.C. Berkeley's Center for the Study of Energy Markets, cutting subsidies for oil companies "would not affect gasoline prices." He further explained:

Gasoline prices are a function of world oil prices and refining margins.  The oil companies are quick to point out that they are not to blame for oil prices because the price is set in the world market, or which they are a small share.  That is all true.   But one implication of that is that the incremental change in production that might result from changing oil subsidies will have no impact on world oil prices, and therefore no impact on gasoline prices. [Email toMedia Matters, 4/28/11]

Canes: Ending Oil Subsidies Would Have "Very Little" Effect On Gasoline Prices.  Michael Canes, a distinguished fellow at the Logistics Management Institute and former chief economist of the American Petroleum Institute wrote in an email to Media Matters that ending subsidies to oil companies would have "very little" effect on oil prices. He further said that there could be "Some small effect if at the margin domestic production is adversely affected, but I suspect that effect would be very small indeed. Personally, I'd like to see an end to ALL energy subsidies, but that's another issue entirely." [Email toMedia Matters, 4/27/11]

Kingston: "It Won't Change The Price Of Gasoline." When asked how the proposed cuts to oil subsidies would affect gasoline prices, John Kingston, Director of News at energy information firm Platts said: "It wouldn't, and I don't view them as subsidies." He added:

The tax breaks on oil are part of the endless discussion about how to tax an economic activity. Do you tax it at 0%? Do you tax it 100%? Or do you tax it in between? You want to tax it at the rate that provides the most money for the government while not inhibiting economic activity.

But that is not a subsidy. My demand for oil isn't going to change one iota because of the changes that are under consideration, and therefore it won't change the price of gasoline.

Oil companies will argue that the changes in the tax rate could change supply.  Now you could build some theoretical model that says, if the tax rate is changed, it MIGHT inhibit production, and therefore down the road, supplies would be less than they would be otherwise. Therefore, the price could be higher and my demand might be less. This is not as crazy as it sounds. If the rate on these forms of exploration went to 100%, obviously, no company would produce that oil, the overall market would tighten, and the price could go up. But that's not in question; the administration is not proposing a 100% tax rate. [Email toMedia Matters, 4/27/11]

Lafakis: Decisions On Production And Development Of Oil Wells "Are More Influenced By Other Factors Such As Oil Prices And Technological Innovation." In an email to Media Matters, Moody's economist Chris Lafakis stated that while he hadn't conducted a full analysis of the implications of tax breaks to oil companies and thus couldn't comment on the impact of legislative proposals, generally speaking, factors other than tax incentives have more of an influence on oil companies' decision to begin exploration or production of a well. According to Lafakis:

Generally speaking however, my sense is that while tax breaks encourage exploration, production and development of oil wells, those decisions are more influenced by other factors such as oil prices and technological innovation. For instance, tax breaks have had little to do with the increase in oil rig drilling since the third quarter of 2009. Instead, oil rig drilling has risen as oil producers have developed methods to extract oil from shale formations in the West North Central census division. [Email to Media Matters, 4/27/11]

CRS: The Market Price Of Crude Oil "Would Not Be Expected To Increase Very Much, If At All," If The Domestic Production Tax Break Were Rescinded. One of the tax breaks President Obama seeks to end is a domestic manufacturing credit. According to a Congressional Research Service analysis of the Section 199 deduction for domestic manufacturing:

As before, eliminating the deduction -- that is to say, raising the corporate tax rate -- would increase total (or average) business costs and therefore reduce profitability among the major oil and gas producers.  As long as marginal production costs are unaffected, there would be no price effects in the short run. Similarly, the demand for imports is likely to remain the same in the short-run.  Thus, this type of corporate income tax increase  would arguably be an administratively simple and economically effective way to capture at least some of the oil industry's windfalls in the short run.  However, at a current deduction of 6%, and a marginal corporate tax rate of 35%, only a small portion of the industry's likely windfalls would likely to be captured under this option.

The market price of crude oil and natural gas, or even of refined petroleum products, such as gasoline, would not be expected to increase very much, if at all, by such a change in the short run.  In general, also, the income tax increases are not expected to have real output effects in the short run, although they could cause resources to flow to other industries in the long run as long as these other industries are allowed the manufacturing deduction, which is equivalent to a lower marginal tax rate. [Congressional Research Service, "Oil Industry Financial Performance and the Windfall Profits Tax," 9/30/08]

Fearing High Gas Prices, Sean Hannity Proposes Re-Invading Iraq and Kuwait To ‘Take All Their Oil’

By George Zornick

Tonight’s Hannity on Fox News featured a discussion by the Great American Panelabout high gas prices, which host Sean Hannity claimed are “now gonna go up to three, four, five dollars a gallon again.” The panel ruefully noted that Arab sheiks possess great amounts of oil, and pointed out a recent statement by Kuwait’s oil minister that he believes the market can withstand $100-per-barrel oil. After noting that Kuwait is a country that “would not exist [but] for us,” Hannity angrily offered his remedy:

HANNITY: There’s two things I said. I say why isn’t Iraq paying us back with oil, and paying every American family and their soldiers that lost loved ones or have injured soldiers — and why didn’t they pay for their own liberation? For the Kuwait oil minister — how short his memory is. You know, we have every right to go in there and frankly take all their oil and make them pay for the liberation, as these sheiks, etcetera etcetera, you know were living in hotels in London and New York, as Trump pointed out, and now they’re gouging us and saying ‘oh of course we can withstand [these prices].’”

Watch it:

In the most recent invasion of Iraq, there have been 4,442 American combat deaths and over 30,000 injuries, many of them traumatic and debilitating. The cost of the war is at $3 trillion and counting, and the invasion demolished America’s global standing. Apparently, Hannity would be willing to re-pay this cost for cheaper gasoline.

Hannity also acts as if Iraq should be grateful for the invasion and turn over its natural resources. Of course, anywhere from 100,000 to one million Iraqi civilians died during the unwanted invasion, which destroyed much of the country’s infrastructure andcultural heritage.

On the other hand, Hannity has previously noted that he “travel(s) on private planes, [and] I have an SUV that I’m proud of.” Surely, the hundred-millionaire would be hurt by $3-per-gallon gas.