August 11, 2012

AP’s Fahey Worries That High Gas Prices Might ‘Put Pressure’ on Obama Re-elect Effort, Ignores Govt.-Caused Reasons For Run-up

Friday afternoon, the Associated Press’s Jonathan Fahey couldn’t get four paragraphs into his report on higher gas prices nationwide without starting to fret about their impact on President Obama’s re-election effort.

He also wanted readers to understand without any doubt that President Obama and the by inference his government bear absolutely no responsibility for the recent run-up to a national average of $3.67 a gallon nationwide with statewide averages in California and Illinois topping $4, and conveniently used one interviewed driver as a prop to begin making his quite transparent political point. Later in the report, he inadvertently cited a reason why the government is contributing to higher prices at the pump. I’ll cite yet another among many additional government-induced factors later in the post.

Here is Fahey’s “don’t blame Obama” verbiage:

US GAS PRICES SPIKE; REFINERY PROBLEMS CITED

The rising prices could also put pressure on President Barack Obama in the heat of his re-election campaign.

When Phil Van Schepen recently went to fill up his dry-cleaning delivery van in Coon Rapids, Minn., he found a Post-it note a driver before him had placed on the pump faulting Obama for high gasoline prices.

“It’s a reminder of his energy policies overall, which I don’t agree with,” said Van Schepen, who buys about 100 gallons a week and finds he is spending about $40 more than he did in early July. Still, he said the Post-it “was a bit much” because the president isn’t responsible for gasoline prices.

Analysts and economists agree, saying prices for crude oil and wholesale gasoline are set on financial exchanges around the world based on supply and demand and expectations about how those factors may change.

Seasonal factors are also sending pump prices higher. Gas usually costs more in the late spring and summer because refiners have to make more expensive blends of gasoline to meet clean air rules and because the summer driving season boosts demand.

The final excerpted paragraph is directly tied to Environmental Protection Agency regulations, as the Washington Times explained a whole 12 years ago during a price run-up in the Midwest:

(An internal Energy Department) memo makes it clear that the EPA rules that went into effect June 1 were a central factor in the Midwest blowup, which was magnified by short supplies.

It states that refineries had been going full blast to produce the EPA-mandated reformulated gasoline, shippers and distributors were straining to deliver enough gas supplies to thirsty drivers, and disruptions of key pipelines had made the supply situation precarious.

Speaking of ethanol, even apart from the blending issue, as a mandatory component in the gasoline recipes in some part of the country, it is also a direct contributor to the run-up, as the Wall Street Journal’s Ben LeFebvre noted yesterday:

The U.S. motorist standing at the gas pump is seeing the effects of the drought ravaging corn production, and that isn’t good for the economy.

… Prices for ethanol, largely derived from corn and accounting for 10% of the gasoline consumed by U.S. drivers, have jumped by nearly one-third to $2.60 per gallon since May because of worries about hot, dry weather that has baked most of the country since June. Nearly all of the ethanol consumed in the U.S. comes from corn, production of which will fall to the lowest level in nearly two decades due to the drought, the U.S. Department of Agriculture said Friday.

The increase in ethanol prices helped spark a 16-cent jump in the national average gasoline price in July—the biggest increase for that month on record …

Gee, I was able to cite two areas where Barack Obama and the U.S. government could have an immediate impact on gas prices: suspending “summer blend” rules whose theoretical benefits clearly aren’t outweighing the costs definitely being imposed on everyone, and removing mandated percentages of ethanol, which would enable refiners to use more and currently less expensive crude oil in their gasoline mixes. There are surely other actions Obama and the government could take if they wished. But they apparently won’t, and Jonathan Fahey is, as is customary at the Administration’s Press, providing media cover.

Cross-posted at NewsBusters.org.

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