Across the country Americans are paying more at the pump. A Los Angeles station raised the price ten cents while the reporter was on television. In Cleveland the price at the pump jumped over 40 cents per gallon in just the past week! Places in Florida are now charging over $5.00 per gallon. These costs are having a significant impact on the average American’s already strained budget.
In response to questions Friday, Press Secretary Josh Earnest offered that the administration was using an all-of-the-above approach though he indicated there was no simple solution. Increased need for oil products in growing countries like India and China will likely keep the demand up. The administration reminds us that the tax break currently being debated by Congress will help with costs, apparently forgetting that these funds are already in our paycheck. The debate is whether to continue it or lose it…not to increase our take home pay.
One has to wonder how motivated this administration is to stem the rising fuel prices. The president is known for his green energy solutions. Senator Obama stated in 2008 that we should “expect electricity costs to necessarily skyrocket” as a means to accept higher cost alternative fuel sources. In a 2008 interview with WSJ Energy Secretary Steven Chu said, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” In May, 2011 Representative Darrell Issa (R-CA) head of the House Oversight Committee reported that “Rising energy costs were an intentional result of government action.”
Still, with rising oil prices, many were surprised when President Obama announced in a February 22 economic speech, the administration will be backing algae bio-fuels as a way to oil independence.
Algae and many other bio-fuels are unproven ideas. They may be an effective alternative to oil but will not help with the price of fuel today or even tomorrow. These budding ideas may show promise but are still in the research and development stage with no expectation of a cost effective product before the next decade. While some companies are actively committed to investigation of algae as a fuel source others, like Shell, have dropped out of the market.
Increase in cost for crude oil is based on future expectations. Jack Gerard with the American Petroleum Institute believes this can be lessened through approval of the Keystone Pipeline and re-opening of offshore drilling. The API is confident through careful planning America can become self-sufficient within 15 years.
In the meantime consumers are feeling the pinch. Increases in transportation costs will surely be passed on at the market. If something is not done to slow the price it will impact the faltering economy. As people scoff at the idea of using pond scum to fuel their cars this cloud over Obama’s head may have significant impact on his reelection.