The Obama Administration on Thursday unveiled a working group of federal agencies to probe potential fraud in the energy market. It isn’t the first time the president has suggested that big oil is to blame for soaring gasoline prices.
Reuters reports that the administration is worried that if petrol prices rise over $4 per gallon, the economic and political fallout could dominate next year’s presidential election and drown out Barack Obama’s message of recovery. So he has asked the attorney general to assemble a team of officials to “root out” fraud in the oil market that affect prices at the pump, including actions by speculators.
The president previously promised to crack down on “price gouging”.
Gasoline prices have skyrocketed from an average of $1.83 per gallon when Obama took office to $3.84 this week.
The unrest in the Middle East is partly to blame. So is increasing demand from developing nations, like China and India, the Obama Administration’s decision to suspend deepwater drilling in the Gulf of Mexico last summer and its refusal to expand domestic oil production elsewhere.
Prices are likely to continue to rise so long as the administration insists that oil is a thing of the past and unprofitable clean fuels should be subsidized.
America’s much-derided dependence on oil is far from irrational. Oil is unmatched as a concentrated, safe and affordable source of portable energy. Despite attempts by the Organization of the Petroleum Exporting Countries (OPEC) to limit production and artificially boost prices, oil is relatively cheap and certainly abundant.
The notion that clean energies, including solar, wind and biofuels, could replace oil any time soon is misguided. All three have received extravagant subsidies in Europe and the United States. Yet America uses more oil than ever.
Americans don’t get 2 percent of their energy from solar and wind and less than 4 percent from biofuels and other plant and animal sources.
If the president really wanted to drive gasoline prices down, he should unleash American oil production.