Jamie Friedland's picture

    Obama Negotiates with Himself on Oil. Again.

    President Obama’s position on oil has been one of the most disappointing and incoherent facets of his administration to date.   On Saturday, this trend continued as the President announced a series of shifts to increase domestic oil production.

    Pundits say he had to respond to high gas prices (which presidents do not control).  This maneuver is political capitulation in the face of a mismanaged narrative in the public discourse.  For years, this “debate” about gas prices has been dominated by flat out lies and misinformation in one of the more disgraceful displays of unaccountability in contemporary American politics. 

    I have attempted to clear the air (pun intended) on this topic a number of times.  For a fuller explanation, please see this previous post.

    Here’s the short version: conservatives claim that high gasoline prices are caused by liberal overregulation stifling domestic oil production.  That just isn’t the slightest bit true.  Oil is a global commodity, so its price is determined on the global market.  We, the United States, represent 25% of world oil demand and about 3% of world supply.  The point here is that we simply don’t have enough oil to affect global supply and thus prices.  And the kicker is that even if we could, OPEC is a cartel; they could/would effortlessly decrease their production to offset any impact we could have. 

    Here’s another inconvenient truth: domestic oil production is already up 11% under Obama and was down 15% under Bush.  That reality doesn't match this GOP argument.  Increased domestic drilling cannot lower gas prices.  Period.  Don’t take my word for it, read for yourself – even the mainstream media have finally caught on recently. 

    US Oil Production

    So back to Obama.  After failing to enact a single piece of oil-spill legislation, the President was finally starting to sound like a progressive on energy again.  In an earlier address he even pointed out the supply/demand reality I described above, although he inexplicably refused to take it to its logical conclusion that drilling cannot be a solution.  To now increase drilling as a response to gas prices validates the baldly fabricated GOP narrative.  Much like the current deficit focus, we’re conceding not only the point but adopting their frame as well.  No good can come of that.  It just doesn’t make any sense.

    Recall that last year, right before the Congressional energy debate, the administration unveiled a plan to dramatically increase offshore drilling.  For which it asked nothing in return.  Rational negotiators might reward unilateral compromise.  A GOP party that miraculously resurrected itself by vociferously opposing any- and everything Obama does would of course do no such thing.  So we gave away a bargaining chip for free [that most progressives would have rather kept] and no energy bill was passed.  Also, this episode occurred just one month before the BP oil spill, which prevented the administration from using that catastrophe as a catalyst for needed change.

    In both cases, the only rationale I can see is political maneuvering.  We know the Obama campaign prizes the supposedly undecided independents and what moderate Republicans still exist “in the middle.”  They think that carving out GOP territory for Obama will undercut Republican attacks.  But even if they pick up some independents, if they sell out progressives to do it that is not a net gain.  Additionally, the GOP won’t care that oil production is up – more than they want these policy objectives, they want to keep their base angry.  Have Obama's oil moves blunted their attacks on this president as anti-oil or trickled into the Fox Newsiverse?  No. 

    Obama's tactics seem to operate from a flawed premise on bipartisanship about which I have previously written, and I am concerned about this plan. 

    Drill, baby, drill is political welfare for Big Oil, plain and simple.  It does not help America, it helps oil executives.  If we’re going to cave on offshore drilling, leverage it for a coherent energy policy.  If we’re going to increase domestic oil production, call it the compromise that it is and justify it as job creation (with a side of pollution and risk); don’t validate their lies.  I can stomach a certain amount of political compromise, but I can’t start defending the Fox News reality as truth.  

    Comments

    Great blog, Jamie. What is silly about this move is that no one cares what the administration says they're doing. People care about the price of gas. If what the administration is doing won't move the price of gas, then it won't affect people's vote. And the administration presumably (?) knows all the stuff you just laid out - i.e. that they can't move the gas price. So basically this is just to piss off progressives and please oil companies as far as I can see. But there is nothing he can do to move the oil companies over from the GOP, so it won't actually placate them much.

    So this looks like a net loss from a purely mercenary campaign perspective imho.


    I agree with you about the futility and silliness of this whole situation, but I don't think the administration is attempting to court oil companies.  And sadly we could be underestimating the effect on voters.  What makes this all so ridiculous is that it's not based on reality anymore.  The GOP position is that drilling is the solution to the problem.  So regardless of whether or not it actually solves anything, Obama has made a "bipartisan" move here, which scores political points and reinforces his campaign narrative.  With nothing else to talk about, if that's the tune pundits sing, that's what a lot of people will take from this episode.  Then in a few months when gas prices drop back down again enough to at least fade from the headlines, he could come out ahead and be rewarded for this.

    I'd be a bit surprised, but I think that's closer to the actual political calculation at the moment.  And on a personal note, I'd like to think he's not trying to piss us off just for the hell of it (although that too could help him with moderates).  


    Yep; nasty.  I put it up In the News a couple days ago, and Miguel added this from washington's blog:

    "Under probing questioning by Senator Cantwell, Exxon Mobil CEO Rex W. Tillerson admitted that oil should be $60-70 dollars a barrel based on supply and demand" with video.

    As a smart electoral move, Obey's mostly right, IMO.  But if you see it more as a campaign finance move, it makes more sense.  Plus it doesn give Obama some room to claim he's trying ta help.  Now he and his team have to know how the hedge fund markets help determine prices, too, and maybe there will be some modifications to those regulatory rules, but I doubt it, myself.

    But add into it the fact that he hired Gene Sperling to his team, and Sperling said about the dangerous, water-killing practice of fracking for natural gas:

    ‘The natural gas industry should support "common sense" regulation to ease public worries about potential water contamination from hydraulic fracturing, a drilling practice vital to the U.S. shale gas boom.’

    "Common sense regulation that builds the public trust that fracking does not put at risk clean or safe drinking water is not the obstacle to natural gas extraction," said Sperling.

    Ha ha ha  ha!  No mention of putting natural gas back under the Safe Drinking Water Act , nossir, just a friendly reminder that the industry rules all, and will obviously be able to convince us that fracking is not dangerous.  Which they are doing massively now on the teevee and internet. 

    Enough of this stuff starts to add up to the fact that...well, draw your own conclusions.  I have.


    I'm a little more hopeful about fracking regulation than I am oil.  Flammable and poisoned drinking water seem to get people concerned even more than vivid oil spill imagery.  Also, the practice and propaganda are less established.  


    Whipple: The Republican bills and the President’s “capitulation” are largely political posturing in advance of the 2012 elections. A new study of the Alaskan petroleum reserve – not to be confused with ANWR (Arctic National Wildlife Reserve) which remains off limits – shows that the region contains much less oil than previously believed. The reserve was opened for drilling by Congress in 1980 but recent auctions have drawn limited industry interest. If there is much oil off the Atlantic coast, it is likely to be years before exploratory drilling begins and many more years before any oil found is exploited in significant quantities. In short, the whole furor is a charade to convince the voters that Congress is doing something about high gas prices, while in reality there is little that can be done. The exercise is similar to the umpteenth investigation of oil speculation that was launched by the administration a few weeks ago.


    Exactly.  What pisses me off is why do we engage in the charade?  Why would we possibly want to perpetuate the GOP lie that drilling is a solution to this problem?  Like Obama positioning himself behind offshore drilling before BP, all we stand to gain from joining the GOP in supprorting fake solutions is that then we too can be blamed when they - shockingly - don't work.


    Should have commented on this yesterday jamie, (when I first read it).  Now I feel compelled to as you've got only 158 "reads" a day later.  Great blog!


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