Analysis: Obama Goes on Offense Over High Gasoline Prices

Thursday, 23 Feb 2012 07:05 AM

 

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As Republican presidential candidates toss barbs at Barack Obama over expensive gasoline, the U.S. president and his team are going on the offensive with a strategy to divert blame and prepare voters for higher costs.

In subtle and not so subtle ways, Obama, a Democrat, is raising the issue of high prices to promote his own policy priorities and blunt criticism from the men vying to unseat him in the Nov. 6 election.

His strategy is both politically- and policy-oriented. The president wants to advance his plans to increase renewable energy sources and reduce U.S. reliance on foreign oil.

But he also needs to win the war of words to gain an upper hand over Republicans in Western battleground states such as Colorado, Nevada and New Mexico, where people drive a lot and feel the sting of rising prices acutely.

Republicans see many weaknesses to exploit. They blame Obama for not doing enough to increase domestic production of fossil fuels and cite his decision to block a new oil pipeline from Canada as evidence that he is beholden to environmentalists.

Rising gasoline costs have brought the issue to the forefront of the presidential campaign. So Obama has started to pepper his speeches with references to prices at the pump.

On Tuesday he cited the extension of the payroll tax cut as a welcome buffer for workers coping with the cost of gas. On Wednesday he proposed — not for the first time — getting rid of tax loopholes that benefit oil and gas companies.

On Thursday he'll go a step further, using a speech in Florida to outline his own accomplishments in the energy arena along with a long-term strategy to keep fuel prices down.

"This is a recurrent problem and it's a problem that reinforces the need that (Obama) identified back when he was a candidate for a comprehensive energy strategy," White House spokesman Jay Carney said. Obama advisers have pointed to growing demand in China and unrest in the Middle East as factors out of their control that are affecting the price of oil.

Average gasoline prices have climbed to their highest February levels on record, hitting $3.53 per gallon last week, according to MasterCard SpendingPulse data.

Gasoline prices have tracked crude oil prices, which have been bolstered by the threat of supply disruptions from the West's standoff with Iran over Tehran's nuclear program.

Some analysts say U.S. prices could hit $4 a gallon or more ahead of the summer when driving demand peaks.

POLITICAL BATTLE

Those prices hurt Obama politically as much as they hurt the country economically, and Republican presidential candidate Rick Santorum seized on them criticize the president for his environmental record.

"Folks are just starting to be able to breathe a little as the economy starts to come back a little bit, unemployment starts to go down," Santorum said at a campaign event last week.

"All of a sudden they are going to be hit with the same force of wind that hit us in 2008 in the summer that caused us to go into a recession. All because of the radical environmentalist policies of this president," Santorum said.

Carney dismissed Santorum's comments as "random statements by politicians seeking office." Obama is the first president to preside over growth in domestic oil production since President Jimmy Carter, also a Democrat.

Republican presidential candidate Newt Gingrich, the former speaker of the House of Representatives, promised at a debate with rivals on Wednesday night that the country would enjoy gasoline prices at $2.50 a gallon if he won the White House.

Analysts and strategists said Obama has few options to bring down gasoline prices in the short term and said his energy policies had evolved from focusing on renewable fuels to promoting nuclear energy and natural gas.

"Basically he's come a long way from the campaign of '08. I think that reflects pragmatism on his part," said Guy Caruso, a senior adviser on energy at the Center for Strategic and International Studies.

Progress or not, Obama has vulnerabilities when it comes to energy. Earlier this year he nixed TransCanada Corp's Keystone XL pipeline under severe pressure from environmentalists.

The president blamed Republicans for forcing him to take a decision under a tighter timeframe than the State Department said it needed to study the project.

Mitt Romney, the former governor of Massachusetts and off-and-on frontrunner for the Republican presidential nomination, said that decision was a sign that Obama wanted to please his political base more than he wanted to improve the economy.

VULNERABILITIES, FEW OPTIONS

Analysts say even if Keystone were approved, the increase in oil supplies would not affect gasoline prices for years, but the decision is nevertheless a key flashpoint in the election.

"The juxtaposition of the high gas prices and Keystone has (the White House) understandably nervous, and even though those two ... have almost nothing to do with each other substantively, they create a political narrative that Republicans could be successful in using to paint Obama as anti-energy and pro-high gas prices," a Democratic strategist said.

Politically, Obama's vulnerability over gasoline prices could be especially deadly in Western states that he needs to win to remain in the White House.

Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution, said Republican candidates could gain traction with voters in that region by emphasizing fuel costs, though they — like Obama — had few options to suggest to bring prices down in the short term.

"Out there (a candidate) can get some resonance against the president by talking about high gasoline prices," he said.

"If someone comes back at him and says, 'What's your policy Mr. Santorum, Mr. Gingrich, or whomever, to lower gasoline prices today,' I don't think they'll have a good answer."

© 2014 Thomson/Reuters. All rights reserved.

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