Kansas City Star, 28 February 2012
Nothing drives voter sentiment like the price of gasoline, which is already up nearly 30 cents from the start of the year and hitting $4 in many places. The last time it topped $4 was 2008.
And nothing energizes Republicans like rising energy prices. House Speaker John Boehner is telling Republicans to take advantage of voters’ looming anger over rising prices at the pump. House Republicans have passed a bill to expand offshore drilling and pressure the White House into issuing a permit for the Keystone XL pipeline.
But the current surge in gas prices has almost nothing to do with energy policy. It doesn’t even have much to do with global supply and demand. It has most to do with America’s continuing failure to adequately regulate Wall Street.
Oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter.
Iran is threatening to cut production in retaliation for sanctions imposed by the European Union and the United States. But Saudi Arabia’s increased production is more than enough to make up the difference.
Demand for oil isn’t rising in any event. Oil demand in the U.S. is down compared to last year at this time. The American economy is showing only the faintest signs of recovery. Meanwhile, global demand is still moderate. Europe’s debt crisis hasn’t gone away. China’s growth continues to slow.
But Wall Street is betting on higher oil prices.
Phi Beta Iota: Brother Reich offers only half the story. Speculators are indeed rampant, and KEYSTONE has nothing to do with US energy needs, only oil company desires to revive aging refineries a long way from Canada, knowing that they can externalize all the costs of wasted water flushing tar sands, and environmental damage along the way. What the learned former Secretary of Labor does not mention is that Goldman Sachs bet on high oil prices long before today, and rumor has it that Israel and Iran did also. he also fails to mention that the price of oil is not really rising, it is the dollar that is falling.