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 for the president to suggest that Big Oil is to blame for soaring gasoline prices.
Reuters reports that the White House is worried that if average gas prices rise above $4 a gallon, the economic and political fallout could dominate next year’s presidential campaign and drown out Barack Obama’s message of recovery. So he has asked the attorney general to assemble a team of agency officials to “root out” cases of oil market fraud that affect pump prices, including actions by speculators.
The president previously promised to crack down on “price gouging” at the pump.
Gasoline prices have skyrocketed during Obama’s presidency, from an average of $1.83 a gallon when he took office up to $3.84 this week.
The continued unrest in the Middle East is in part to blame but the increasing demand from developing nations as China and India as well as the administration’s decision to suspend deepwater drilling in the Gulf of Mexico last summer and its refusal to expand domestic oil production has also to be taken into account.
Gasoline prices are likely to continue to rise as long as the administration insists that oil is a thing of the past and unprofitable clean fuels should be subsidized.
America’s much criticized dependence on oil is far from irrational however. Oil is unmatched as a concentrated, safe and affordable source of portable energy. Despite attempts on the part of the Organization of the Petroleum Exporting Countries 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 moreover. All three have received extravagant subsidies in both Europe and the United States. Yet America uses more oil than ever. Americans get less than 2 percent of their energy from solar and wind combined and less than 4 percent of their energy, including transportation fuel, from biofuels and other plant and animal sources.
If the president really wants to drive down gasoline prices, the solution is simple — increase American oil production to meet surging global demand.