Obama and Ahmadinejad—Who Affects Gas Prices More?

Daniel Kish March 9, 2012

Daniel Kish is the senior vice president for policy at the Institute for Energy Research.


President Barack Obama has about as much control over retail gas
prices as Iranian President Mahmoud Ahmadinejad. Which is to say,
he's partly responsible for the pain Americans are feeling at the pump.
The diminutive Iranian tyrant may well put the choke hold on the
Straits of Hormuz and send oil prices into the stratosphere, but only
President Obama can end the embargo on American oil that his
administration has put in place.


To be fair, numerous factors go into the price of gasoline.
Federal, state, and local taxes account for about 12 percent of the
price of gasoline. Refining oil into gasoline adds about 6 percent
and local service stations add 6 percent for overhead. That leaves 76
percent of the price of gasoline that is tied directly to the price
of crude oil.
[See a collection of political cartoons on gas prices.]


U.S. presidents can have a tremendous impact on the price of oil. In
fact, on July 14, 2008, President Bush announced the end of a
moratorium on offshore drilling in the United States. While he was
speaking—before a single permit was granted or a single drilling
platform was built—the price of oil dropped $9.26 per barrel. Contrast
that with President Obama's record. On Jan. 20, 2009—the day
President Obama took office—oil was selling at $38.74 a barrel and the
average retail price of gasoline was just under $1.90 a gallon.
Today, however, oil is trading over $108 a barrel and gasoline is
approaching $4 a gallon nationwide. What's happened in the last three
years? For starters, the Obama administration has cut oil production on
federal lands by 11 percent last year and has issued 35 percent fewer
permits annually than the Bush administration. Moreover, none of the
offshore areas President Bush opened in 2008 will even be offered
until 2017 under the president's plan.
[See a collection of political cartoons on energy policy.]


At every turn, President Obama has signaled that he will limit the
supply of American oil from federally controlled lands both onshore and
offshore. Those signals are as important in setting the price of oil
futures as Ahmadinejad's saber rattling in the Persian Gulf. One man
wants to control the Persian Gulf, the other the Gulf of Mexico.
Neither seems to care much about the hit on American pocketbooks.
And if the administration wants to prove me wrong, let the president
publicly embrace drilling in Arctic National Wildlife Refuge or
pledge to open the coasts of California and Virginia, and let's see
what happens to the price of gasoline.

http://www.usnews.com/opinion/blogs/on-energy/2012/03/09/obama--ahmadinejad-who-affect-gas-prices-more