gas prices

The Audacity of Contempt

Robert Borosage — Tue, 05 Aug 2008 16:31:00 -0700

Take gas prices, the most pressing issue on the minds of Americans. Offer a blatant ploy that in fact won't help — but will profit Big Oil. Pocket over a million in contributions from oil executives and use the money to put up an ad promising to take on Big Oil.

Call it the audacity of contempt. Sen. John McCain seems intent on proving that it is possible to scorn Americans into voting for him. Consider McCain's latest ad in the context of his "drill, drill, drill" energy policy. The text of the ad reads:

"Washington's broken. John McCain knows it. We're worse off than we were four years ago. Only McCain has taken on big tobacco, drug companies, fought corruption in both parties. He'll reform Wall Street, battle Big Oil, make America prosper again. He's the original Maverick...

"Battle Big Oil." Say what?

This is the same John McCain who just made offshore drilling for oil a centerpiece of his campaign, reversing his longstanding opposition to it. He did so, not incidentally, while on his way to Texas for a series of fund-raisers. The result unleashed a gusher of donations for Big Oil executives — according to Campaign Money Watch, a nifty $1.2 million from Texas gas and oil interests in June alone, the very month McCain came out for drilling. He no doubt was told what to expect from the dozens of oil company lobbyists and retainers that reportedly are working with or raising money for his campaign.

Exxon reports an $11.7 billion profit for the last three months — a new record in the history of corporatedom. The big five pocketed more than $140 billion last year. So Sen. Barack Obama suggests that we provide every American with a $1,000 tax rebate to help pay for rising prices, paid for by levying an excess profits tax on the oil companies.

What does the maverick battler of Big Oil say? No way. McCain angrily dismisses the idea, saying that it would lead the oil companies to reduce their drilling in the US.

Now, all of this is based upon what might generously be called a big lie. The Big Oil companies, who hold leases for millions of acres that they aren't drilling on, have no intention of drilling for oil off our shores in the near future. They are simply looking to use the crisis to accumulate rights to drill in the future.

Moreover, even if they started tomorrow, it wouldn't help. As Bill Scher of the Campaign for America's Future has detailed, Bush's own Energy Department reports that offshore drilling would produce no relief until about 2030. (McCain disputes that, saying that we'd see oil in a year or two. His source? Anonymous Big Oil executives who no doubt have only the public's interest in mind.) And once the oil comes on line, the Energy Department tells us, it would save us about 6 cents a gallon off the price of gas.

Ironically, McCain regularly sneers at Obama for suggesting that simply filling our tires would have more effect on supply and demand than drilling offshore. But again, according to the Bush Environmental Protection Agency, Obama had that right. If every American kept their tires filled, they'd save the equivalent of 12 cents a gallon starting tomorrow. Drilling sounds muscular but it is simply hot air that would be better used filling up tires.

But this isn't about policy; it's about politics. McCain pretends he's for action now. He paints Obama as out of touch. The fact that the plan would cater to the interests of the oil companies and not the pocketbooks of Americans is beside the point. After all, John McCain is the maverick, ready to "battle Big Oil."

Will it work? Daily tracking polls suggest McCain has been gaining on Obama. And other than House Majority Leader Nancy Pelosi, Democrats have been deciding to switch rather than fight on offshore drilling.

But there is one problem. Americans really are hurting this year. It isn't just a "mental recession;" it's the real deal. And they are paying greater attention than ever before. This week, Obama released a full-scale plan to move to energy independence, investing $150 billion over 10 years in renewable energy and conservation, providing subsidies to ensure that the U.S. captures some of the new green auto and appliance markets of the future. That puts us on a long-term path to a sustainable energy future. In the short term, Obama takes on Big Oil with the excess profits tax to help Americans struggling with the cost of gas and food. McCain has a pretty good long-term plan also. The differences would be worth debating.

One difference, though, is clear. McCain's not about to support a tax on the big oil companies, whose executives are helping to fund his campaign. But that won't stop him from selling himself as a maverick promising to "battle Big Oil." If nothing else, he has the audacity of contempt for the very voters he needs to win.

This article originally appeared on The Huffington Post.

McCain's Flea-Market Economy

Tula Connell — Wed, 02 Jul 2008 13:41:48 -0700

George W. Bush's solution to our nation's economic mess—that his failed policies helped create—is to applaud people who must work three jobs to make ends meet.

Sen. John McCain colors his solution to working families' financial struggles with similar crayons: He encourages us to make a living selling stuff on eBay. As reported on Bloomberg:

McCain, seeking to address voter anxiety about the economy, uses eBay to signal that he is ``fundamentally optimistic about the capacity of the U.S. economy to innovate, for that innovation to give new opportunities for jobs,'' said Doug Holtz-Eakin, the candidate's senior economic adviser. "We shouldn't be obsessed with looking backwards all the time, and saying, 'Gee, where did those jobs go?' "

Why worry indeed? After all, top McCain adviser Randy Altschuler is fond of an India-based company whose mission is to convince U.S. companies to outsource jobs to India. McCain also takes economic advice from a former lobbyist for a bank with interests in the housing market—and then there's Douglas Holtz-Eakin, a top economic adviser to McCain who acknowledges McCain doesn’t want to include labor and environmental standards in trade agreements.

McCain's support for a flea-market economy based on eBay is fundamental to his disconnect from the realities facing working families. Like Bush, McCain recently admitted he doesn't know the price of gas. Guess what? Working families sure do.

Stumping for the presidential primaries, McCain has snubbed America's workers by:

· Promoting failed trade agreements like the North American Free Trade Agreement (NAFTA) while standing in front of a failed factory in Ohio.
· Holding a town hall meeting at Worth & Co., a Bucks County, Pa., contracting company investigated by the state Department of Labor and Industry for “intentionally failing to pay the predetermined minimum wage” to its employees. The state has accused the company of cheating employees out of $142,000 in wages for government projects.
· Not bothering to respond to invitations by union members holding roundtables on the economy.

This is how McCain's treats workers when he needs votes. Imagine what a McCain presidency would be like for working families when he thinks he has a mandate to govern.

After Eight Years In The White House, No "Quick Fix" On Oil

Bill Scher — Mon, 02 Jun 2008 12:09:53 -0700

Bush's Treasury Secretary Henry Paulson is on a Middle East tour. Apparently, it's a comedy tour.

Yetsterday, the Associated Press reported from Qatar:

U.S. Treasury Secretary Henry M. Paulson Jr. said Sunday that there was no quick fix to high oil prices...

No quick fix! Paulson's boss President Bush has only been running the White House for eight years. Cut the guy some slack!

And today in Abu Dhabi, Paulson lays out a road map for what needs to be done:

Successfully alleviating the pressures in oil markets will require matching supply to demand. On the demand side, we need to allow market forces to work, to avoid subsidies and other potentially distorting policies. We also need to invest in renewable fuels and alternative technologies, and to reduce oil dependency through improved energy efficiency.

Perhaps so he wouldn't be in on the joke, no one told Paulson that President Bush and his conservative allies have fought tooth and nail to protect "distorting" tax subsidies for Big Oil, instead of repealing them and using the revenue "to invest in renewable fuels and alternative technologies, and to reduce oil dependency through improved energy efficiency."

After you're done laughing, take solace in that at least the growing consensus regarding our energy policy extends to Bush's Treasury Secretary.

Now we only need fewer filibustering conservatives in the Senate so we can turn the public will into real policy.

GAS TO COST HOUSEHOLDS $2,300 MORE THIS YEAR THAN IN 2001

Toby Chaudhuri — Thu, 22 May 2008 06:00:00 -0700

WASHINGTON – Faced with gas prices nearing $4 per gallon and the heavy summer driving months ahead, households are expected to spend $2,300 more on gas this year than seven years ago, according to a new report released today by the Campaign for America’s Future.

Campaign for America’s Future co-director Robert Borosage said that the all-time high in gas prices shouldn’t surprise anyone because big oil companies wrote President Bush’s energy policy and the war in Iraq has driven up prices around the world.

“For seven years, Bush’s policies have completely failed to protect our nation’s energy security,” said Borosage. “While oil company profits are the highest in history, people across the country are paying the price at the pump. With everyday costs on the rise, Americans are under the most economic pressure in recent history.”

The report also provides state-specific evidence that the economy is in dire straits and that American families are hurting. It provides detailed information about state job losses and stagnant wages, and shows energy, health care and college tuition costs on the rise. States experiencing the most economic difficulties are Michigan, North Carolina, Ohio, Maine and Tennessee.

# # #

**NOTE: An electronic copy of the report is available at www.ourfuture.org.**

GAS PRICE INCREASE
BACKGROUND

The annualized cost of gasoline per household is computed by multiplying three figures.

--The average number of vehicles per household in both 2001 and 2008: 1.9
[Source: U.S. Dept. of Energy, Energy Information Admin., Transportation Energy Consumption Surveys]

--The average number of gallons consumed in a year: 573 in 2001 and 597 in 2008
[Source: U.S. Dept. of Transportation, Federal Highway Admin., Annual Vehicle Distance Traveled in Miles and Related Data.]

--The average price per gallon: $1.47 for 2001 (which is $1.78 adjusted to today’s dollar) and $3.80 today
[Source: Oil Price Information Service in cooperation with Wright Express, distributed by AAA.]

In 2001, (1.9 vehicles) x (573 gallons per vehicle) x ($1.47 per gallon) = $1,600.39

2001 adjusted for inflation, (1.9 vehicles) x (573 gallons per vehicle) x ($1.78 per gallon)= $1,937.89

In 2008, (1.9 vehicles) x (597 gallons per vehicle) x ($3.80 per gallon) = $4,310.34

Difference from 2001 to 2008 = $2,709.95

Difference from 2001 to 2008 adjusted for inflation = $2,372.45

In sum, “more than $2,300” is a very conservative figure.

ECONOMIC INSECURITY REPORT
STATE-SPECIFIC BACKGROUND

--MICHIGAN: Michigan’s number one ranking in economic pressures reveals America’s shrinking industrial base. The state has high unemployment and the largest decline per capita in both manufacturing jobs and construction jobs.

--NORTH CAROLINA: North Carolina’s high ranking also stems from a decline in industry. It has the fourth highest decrease in goods-producing jobs and third highest decrease in manufacturing since 2000. North Carolinians also suffer problems with health care coverage. Thirteen percent fewer people in North Carolina got health care through their employers in 2006 than in 2000 and nine percent spend more than a quarter of their income on health care.

--OHIO: Ohio’s ranking is the result of low wages and high costs. Wages increased only two percent since 2000, and more than one in ten construction jobs has been lost. Public college tuition in Ohio has increased by more than 62 percent over the same period. A year of state college now costs 20 percent of a median Ohio family’s income.

More state-specific data is available at www.ourfuture.org.

Is It Even Possible To Reduce Gas Prices This Year?

Bill Scher — Thu, 08 May 2008 14:52:17 -0700

Both parties in the Senate have just introduced legislation in response to high gas prices. The Republican announcement states its bill with "Reduce Gas Prices And Decrease Dependence On Foreign Oil," while the Democrats say theirs "addresses the root causes of high gas prices."

Neither directly promises to reduce gas prices immediately. Because neither would.

Granted, both bills would temporarily suspend putting oil in the Strategic Petroleum Reserve for the rest of the year to increase commercial supply, which Democrats say could lower gas prices between 2 to 5 cents a gallon. A typical two-car household uses about 1200 gallons of gas. So for a six-month period, that's upwards of $30. Marginal short-term help, and probably negated by continued price increases.

Beyond that, the Republican bill is just a continuation of the conservative obsession to drill for oil in the Arctic National Wildlife Refuge. Would that reduce crude oil prices? About 50 cents a barrel 17 years from now. Meanwhile, crude oil prices have risen more than $80 on President Bush's watch. So the answer is yes, but that and two bits will get you ... a slightly cheaper barrel of oil 17 years from now.

And Republicans repeat their call to suspend environmental standards for oil refineries, claiming that would produce a greater supply of gas. But oil companies can build refineries now. They choose not to, not because of environmental standards, but because it's not profitable for them to increase supply.

Regarding the Democratic bill, it would be more precise to say it addresses the root cases of high energy prices. It would jumpstart long-term investment in renewable energy, creating clean and affordable energy alternatives so eventually, we will no longer be at the mercy of gas price spikes.

The bill would repeal tax breaks to Big Oil, and impose a windfall profits tax on "companies that fail to invest in increased capacity and renewable energy sources" and invest the proceeds in renewable energy and "consumer price protection."

That's a critical step towards a clean energy future. But diverting that money to consumers is more likely to help mitigate further short-term price increases than to lower gas prices from where they are now.

The Democratic bill also has provisions to combat possible price gouging by oil companies, market speculation by futures traders (CQ reports that "some experts say [speculation] may account for 10 to 30 percent of the price of oil), and price collusion by the OPEC cartel.

There's been some healthy debate among progressives whether those steps would be effective in lowering oil prices, in part because they are arguably not the "root causes" of the current price spike.

Dan Weiss of the Center for American Progress told the Washington Post that ""With analysts predicting $150-per-barrel oil by fall, efforts to rein in price gougers, speculators and OPEC couldn't come at a better time." The Sierra Club also says the bill would "protect consumers."

But David Roberts of Grist, while strongly supportive of the investment in renewable energy, scoffs at the other planks.

He calls the impact of speculation on prices "a blip," price gouging a "conspiracy" and going after OPEC pointless because they're already producing as much as they can. (Regarding gouging, note that one study did find evidence of gouging, but when market prices are heading down, and oil companies drag their feet on lowering retail prices accordingly.)

Both Roberts and the blog Energy Smart lament that Democratic messaging doesn't emphasize the fundamental root causes -- increasing global demand, decreasing global supply, weakening US dollar, and a failed foreign policy that has contributed to destabilized oil-producing regions -- to downplay expectation that oil prices can be cheap again and help rally support for investment in renewables.

Fair point and good advice for the long-term. But Americans are suffering in the short-term and do need relief.

The current price for a gallon of gas is 82 cents more than the average price in 2007. For a typical household, that difference amounts to $1000 more spent a gas for the year.

That's real financial strain in the short-term, but the root causes for higher prices are deep ones not easily affected by short-term measures.

But the reality is that Congress has already done something to deal with the gas price spike.

As I noted when the economic stimulus package was being debated, the tax rebate checks in the mail, which range from $300 to $1200, will largely be swallowed up by higher gas costs. It is effectively a gas price rebate.

Which would be fine, if higher gas prices were our sole economic problem. Sadly, our economic problems run deeper than that.