Energy Policy: That gas prices are edging ever closer to $4 a gallon is bad enough. But even worse is the fact that the public blames the wrong villains. No wonder President Obama seems so unconcerned.
Last week's average price for regular gasoline hit $3.94 a gallon, according to the Dept. of Energy. That's up 11 cents in just three weeks, and more than $2 a gallon since Obama took office.
So who gets the blame? Obama for cutting oil production on federal lands and killing Keystone XL pipeline, for endlessly berating the industry and offhandedly dismissing oil as "yesterday's fuel"?
Nope, almost half of Americans in the latest IBD/TIPP poll blame oil companies and Wall Street speculators, the two players that have nothing whatever to do with the pain at the pump.
Twenty-eight percent blame price-gouging by oil companies as being most responsible for rising gas prices. And 18% blame "the actions of speculators." Just 13% blamed "lack of domestic production."
But the Federal Trade Commission and the Government Accountability Office have repeatedly investigated the oil industry for collusion or price gouging after previous price spikes. Each time they've found the same thing: The industry is highly competitive, and supply and demand, not collusion, set the price of oil.
It's the same with speculators. As IBD reported last month, a September 2011 study from the Institute for International Finance found no "clear causal link between financial investment and commodity prices" while the link "between commodity prices and fundamental supply and demand factors is indisputable."
An earlier investigation by the Commodities Futures Trading Commission found the same thing. Not that Obama, or his fellow Democrats or their friends in the mainstream press, will ever explain any of this.
Obama continues to bemoan the industry's allegedly ill-gotten gains, demand an end to their "tax subsidies" and suggest that somehow speculators are behind high prices too. In fact, he made sure to "reconstitute" a Justice Dept. task force set up amid high prices last year allegedly to root out speculative price manipulation.
Yet instead of correcting the public's misperceptions about why oil prices are high, media watchdogs have been more interested in parroting Obama's defense that none of this is his fault. He's greatly boosted production, they say, and it's had no effect on prices.
That's not true, either. Domestic production has risen only modestly in the past three years, and that's from all-time lows. Production is still down more than 40% below the peak set in the 1970s, and all the gains came despite Obama, who has cut production on federal lands.
It's also not true Obama is powerless to affect prices.
If he announced an aggressive plan to tap into the nation's vast supplies of oil — enough to last 200 years without imports — the oil market would respond right away by lowering prices. When President Bush said he was going to lift the presidential embargo on offshore drilling, oil prices immediately fell by $9 a barrel.
Obama could also lift the government's boutique fuel rules that have Balkanized the country's gasoline market and pushed up prices, rein in his out-of-control EPA, and work to strengthen the dollar.
To be sure, Obama isn't entirely to blame for high prices — they're also the result of decades of federal mismanagement that have kept huge supplies of oil off limits.
But there's no question that Obama is far more to blame than are the oil companies or speculators currently bearing the brunt of public anger.