High gasoline prices are not a cause of the current economic recession, they are an avoidable and unnecessary symptom of liberal environmental and economic policies. When President Barack Obama took office the price of gasoline was $1.83 per gallon. Today it’s over $4.00. Understanding why that is so will give you insight into the patient game plan of the fossil-fuel-hating, combustion-engine-despising, environmentally obsessed left.
The high price of gas is not simply a function of the cost of crude oil. There are many causes for the $4.00 we are currently paying for a gallon of gasoline. Of that $4.00, taxes account for 52 cents, distribution and marketing about 32 cents, refining 56 cents, and the cost of crude oil $2.60. By the mid-20th century, oil was surpassed only by income taxes as the largest generator of revenue for the U.S. government.
The United States is actually the third-largest producer of crude oil in the world, but we still import nearly 40% of our crude oil demand, mainly from Canada, Mexico, Saudi Arabia, Nigeria, and Venezuela. But here is where life becomes quite simple. The more crude oil we produce domestically, the less taxes we heap on a gallon of gasoline, the fewer hurdles and blends we require of domestic manufacturers, the less we pay for gasoline. U.S. domestic oil production peaked way back in 1970, and by 2005, imports were twice that of domestically produced crude oil.
President Obama follows the liberal playbook about energy independence — code for wind and solar energy which won’t fuel our automobiles, jets, ships, or the war machines he has sent into Libya. He misleads the American people about ethanol leading to energy independence. It can’t and won’t. Ethanol is not economically competitive. Corn ethanol costs an average of $2.53 to produce – several times the 56 cents it costs to produce a gallon of gasoline. Instead, ethanol simply raises the price of gasoline we pay at the pump.
President Obama overreacted to the British Petroleum Deep Horizon oil spill in the Gulf of Mexico last year by issuing a crippling moratorium on offshore deepwater drilling. The spill was a result of a lack of sufficient oversight during the transition of the rig from exploration to commercial production, a particularly low-probability event. The moratorium did nothing to address the root cause of the accident. The 5th Circuit Court of Appeals agreed with this line of reasoning, yet White House officials falsely represented to the public last year and more recently to a court that scientists had approved the blanket drilling moratorium. The administration then defied a federal court by replacing its original moratorium, which had been struck down, with a substantively identical second moratorium — for no good reason.