02 May 2008

Election 2008: Gas Prices

As The Associated Press reports, "soaring gasoline prices are suddenly the nation's No. 1 crisis, and all the presidential candidates are offering cures." And with its May 13 approaching, West Virginia is seeing at least two of the candidates bringing up that issue in the state.

AP reports that on the campaign trail, "The slew of proposals includes: a summertime suspension of federal gas taxes, backed by John McCain and Hillary Clinton; a windfall-profits tax on oil companies, supported by Clinton, Obama and many other Democrats; a cry for new refineries, nuclear power plants and drilling in the Alaskan wilderness, sounded by President Bush and his GOP allies; calls by those in both parties to stop buying oil at $117 a barrel - only to pump it back into the ground for strategic reserves."

The Charleston Gazette and the Charleston Daily Mail both touch on the gas price issue in their coverage. The latter observes that Barack Obama has "aired a statewide commercial attacking the oil industry for sky-high gas prices and pushing for alternative energy solutions and 'green' jobs creation."

Obama supporter and U.S. Sen. Jay Rockefeller, D-W.Va., meanwhile, has proposed what The Register-Herald of Beckley calls "monthly handouts of $100 to $165 for low-income motorists strapped to buy gas in a time of soaring prices." MetroNews also reports on Rockefeller's "low-Income Gas Assistance Act."


clear eyes said...

There's way too much pandering from all sides on this gas price issue. Gas price is determined largely by oil prices. Oil price is dtermined in a free and open marketplace based on global supply and global demand. Global demand is increasing faster than global demand, so price goes up. On top of that, the U.S. dollar has been weakening, so the price goes up faster here than in other parts of the world.

If we want to reduce price, we can strenghtn the dollar, increase global supply, or decrease global demand. The main factor in increasing global demand is the emerging middle class in places like China and India, while U.S. demand has actually dropped. That leaves the U.S. with increasing supply (a long-term project involving new exploration - OPEN ANWR and the outer continental shelf) and/or strengthening the dollar (which would likely require increasing interest rates and damaging the economy).

If a pollitician offers any other solution, chalk it up to pure pandering. And the suggestions I've heard so far are actually worse than doing nothing.

Anonymous said...

That windfall profits tax worked real well the last time.
We need more oil not less.

Johnny Oilseed said...

"Gas price is determined largely by oil prices."

I guess that's why the oil companies have been posting record profits for years on end. Have you checked the gas prices in Venezuela? How about Saudi Arabia?