Can government lower gas prices? This question popped up Tuesday
night during the second presidential debate, but neither President Obama
nor former governor Mitt Romney directly answered it. Instead, they
debated their energy policies, which analysts say have little immediate
effect on prices at the pump.
The candidates talked about the need
to expand domestic oil and gas production, boost energy efficiency and
develop renewable energy.
What they didn't say is that U.S. gas
prices are largely determined by something else: global crude oil
prices, which depend on myriad factors such as economic sanctions on
Iran, spare oil capacity in Saudi Arabia and auto use in China - factors
over which they have little control.
"Politicians don't like to
admit they don't have control over everything," says Daniel Weiss, an
energy expert at the Center for American Progress Action Fund, a
non-partisan advocacy group that favors a clean-energy agenda.
"A
non-answer probably reflects the complexity of the issue," adds Branko
Terzic, a former commissioner of the Federal Energy Regulatory
Commission who now heads the Deloitte Center for Energy Solutions. He
says prices also vary within the United States because of localized
conditions such as oil supply, refinery capacity and transportation.
"High
gasoline prices in California are due to a fire at a major oil refinery
and a power failure - not a lack of oil," says Weiss, adding Romney's
"drill, baby, drill" proposals may boost domestic supply but won't
necessarily bring down gas prices. "Even though Canada produces nearly
all of its oil, it too had high gasoline prices this year due to high
worldwide oil prices."
Pain at the pump seems particularly
peculiar this year, because the United States is not only producing more
crude oil but also using less of it - leading to a steep drop in net
oil imports since 2005.
Although U.S. production of oil and
petroleum products has increased 20% since 2008, it was still only 11%
of the world's supply last year and 53% of what the nation used,
according to the U.S. Energy Information Administration. In other words,
it's just not enough to sway global crude oil prices - and gas prices.
Yet
high gas prices - averaging $3.76 for a gallon of regular nationwide
but exceeding $4 in seven states, according to AAA - remain a potent
pocketbook issue. Whenever they've surged this year, Romney has
criticized Obama for them. In 2008, when he was running for president,
Obama partly blamed then-president George Bush for that year's surge in
prices.
"The reality is that presidents have very little to do
with near-term fluctuations in gasoline prices," Frank Verrastro,
director of the energy program at the Center for Strategic and
International Studies, told a U.S. Senate panel earlier this year.
"High
gas prices are bad for incumbents," Weiss says, because presidents have
limited authority over them. He says they can urge, but not order,
regulators to crack down on Wall Street speculators who inflate crude
oil prices and can - in cases of extreme supply disruption - sell oil
from the U.S. Strategic Petroleum Reserve.
During Tuesday's
debate at Hofstra University in Hempstead, N.Y., Romney suggested Obama
had more control. "The proof of whether a strategy is working or not is
what the price is that you're paying at the pump," Romney said, adding
that gas prices would be lower if Obama's energy strategy worked.
"When
the president took office, the price of gasoline here in Nassau County
was about $1.86 a gallon. Now, it's $4 a gallon," Romney said, calling
for an increase in domestic energy production.
Obama said gas
prices were lower at the beginning of his administration because "the
economy was on the verge of collapse." He said that "the most important
thing we can do" to lower prices "is to make sure we control our own
energy."
After citing the U.S. boom in oil, natural gas and coal
production during his administration and his doubling of car
fuel-efficiency standards, Obama said he's pushing for more renewable
power and energy efficiency. "That's how we're going to reduce (oil)
demand and that's what's going to keep gas prices lower."
USA Today