Wonky

Are High Gas Prices A Plot To Cut Consumption? GOP Says Yes

A driver pumps gas into his Toyota Prius hybrid at a gas station in Sunnyvale, Calif., in 2007. i i

hide captionA driver pumps gas into his Toyota Prius hybrid at a gas station in Sunnyvale, Calif., in 2007.

Paul Sakuma/AP
A driver pumps gas into his Toyota Prius hybrid at a gas station in Sunnyvale, Calif., in 2007.

A driver pumps gas into his Toyota Prius hybrid at a gas station in Sunnyvale, Calif., in 2007.

Paul Sakuma/AP

As gasoline prices rise, some Republicans are making a provocative claim about President Obama. They say higher energy prices are actually part of the administration's agenda and they point to some comments made by the president before he took office.

Presidential candidate Mitt Romney was the latest Republican to make the charge about President Obama, and he did so on Fox News Sunday this past weekend, saying, "There's no question that when he ran for office he said he wanted to see gasoline prices go up."

The allegations stem from interviews Obama gave in 2008 when gas was topping $4 a gallon. Then-Sen. Obama was speaking about long-term energy policy with CNBC's John Harwood.

Obama suggested that something good might come out of rising energy prices if it encouraged the market to develop alternative fuels. Harwood asked Obama if he thought high prices could "help us?"

"I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing," Obama replied.

Obama also gave another interview that year about his support for cap-and-trade, noting that it would necessarily cause the price of electricity to skyrocket. But in neither interview did Obama say he favored higher prices.

On the other hand, says John Kingston, director of news at Platts, Obama's current energy secretary did say something like that, remarks he has since disavowed.

"Steven Chu definitely did say it. He was quoted in 2008, so that was before he was secretary of energy, as saying we need to get back to European prices," Kingston says.

Among environmentalists, Chu's thinking is pretty orthodox. Europeans pay a lot more than Americans do for gasoline. And some experts think Americans won't conserve more until they're forced to pay more for the energy they consume.

"The discussion about the benefits of raising gasoline prices really [reflects] that ..." says David Victor, a professor at the University of California, San Diego, who studies energy policy. "It's really hard to do much about the demand for gasoline without doing something about price."

Victor says the problem is energy prices keep fluctuating, but if consumers knew prices were going to stay high and could plan for it they'd change their behavior more than they do now. That was the thinking behind President Clinton's failed attempts to impose a BTU tax on energy.

But that effort ran into resistance in Congress, and since then "the conventional wisdom in Washington has been new energy taxes are dead on arrival," Victor says.

For Kingston, there's an irony in all this.

The Obama administration has coincided with a big increase in domestic production of oil and natural gas. Kingston says no one foresaw this four years ago.

"I can't imagine that on Inauguration Day 2009 Barack Obama thought that one of his priorities was seeing U.S. oil production rise by another half-million barrels or more per day," Kingston says.

Kingston says the boom benefits the president politically, and Obama has started to talk about it on the campaign trail. On Wednesday, he kicked off a two-day tour of four states focusing on energy policy. Obama visited a domestic drilling field in New Mexico that produces both oil and natural gas.

So the president who came to office hoping to boost alternative energy is campaigning for re-election on a boom in more traditional energy sources.

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