What Should Be Done About Gas Prices?

COMMENTARY | Nothing.

That's the short answer. It's also the very unpopular answer according to PollingReport.com. It was reported that 65 percent of people disapprove of the way President Obama is handling gas prices. This information comes the same day as a LA Times article that summarizes a federal report stating that foreign oil imports are down 10 percent, and domestic production is at its highest level in nine years. I believe the way in which opinions expressed in this survey reflect reality are highly suspect, given the relatively small number of people and the fact that no area of his administration received a higher approval rating than 38 percent, with the odd exception of his handling of Afghanistan, a situation which has become disastrous in the last week and a half after the Qur'an burnings, Afghan riots, and a mass murderer.

But if we assume that these statistics are representative in any way, I am very disappointed by the American electorate's gullibility in believing the GOP rhetoric about gas prices. The fact is that the price of crude oil is set on the world market by commodity traders and speculators who see the situation in Iran and the growing energy needs in quickly modernizing nations like China, Russia, and India, as a threat to the stability of the global oil supply.

But the real issue is what the government should do, and the answer is still nothing. The U.S. reached "peak oil" in 1972, meaning that we were producing and refining the most oil possible 40 years ago and our reserves have been dwindling as you can see from Tam Hunt's article on RenewableEnergyWorld.com. Many have called for offshore drilling and natural gas obtained by hydraulic fracturing or "fracking" which the EIA (Energy Information Administration) says could result in the production of 6.1 million barrels a day by 2035. This sounds like a large number but we currently produce just under six million barrels a day and clearly that isn't working.

So I believe the administration has two options. The first is to continue on as we know because that is the popular idea at the moment. The people want cheap gasoline, so in an election year it's tempting to promise to give them what they want. The second is to stop trying to pander to the masses who have little or no understanding of energy, world markets, peak oil, and the environmental consequences, and start making a serious, determined effort to invest heavily in alternative and eco-friendly energy and be confident that they will appreciate it in the future.

Source: http://news.yahoo.com/done-gas-prices-165700269.html

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