GOP cautious as Obama uses high gas prices to tout green tech
President Barack Obama wants to keep oil prices high to boost favored green-tech companies, some energy experts say, though you wouldn’t know it from the relatively tame criticism by senior Republicans on the matter.
Obama and his deputies “support certain forms of energy, and the best way to make them affordable is to break the kneecap of existing sources of [oil and coal] energy,” said Dan Kish, a senior vice president for policy at the Institute for Energy Research.
“It’s the Tonya Harding approach to energy,” Kish said, referring to a 1994 incident in which the figure skater’s associates attempted to injure a rival ahead of a competition.
That’s a stronger message than the one pitched by GOP legislators, who tend to blame Obama for high oil prices without accusing the president of actually desiring them.
House Speaker John Boehner, for example, said today that he thinks Obama “would prefer to see lower gas prices, at least through election day.” However, Boehner added, Obama’s energy secretary “has made it pretty clear [on Jan. 28] that his goal is to have higher energy prices.”
Obama highlighted his focus on green technology again today when he tried to minimize the political damage caused by high gas prices in an energy speech in Nashua, N.H.
In the speech, Obama ridiculed the prospects of a near-term drop in gas prices and touted his funding for alternative technology development. (RELATED: Full coverage of the Obama presidency)
“There are no short-term silver bullets when it comes to gas prices,” the president told students and employees at Nashua Community College.
However, “as long as I am president, I will not walk away from the promise of clean energy,” he declared.
To make the sale, Obama shifted the focus from oil prices and green-tech subsidies — which total more than$35 billion since 2009 — by saying the country would gain from reducing oil imports and cutting oil companies’ tax breaks.
The percentage of oil imported for consumers has dropped by one-quarter — from 60 percent to 45 percent — since 2005, according to a chart Obama displayed during his speech. However, green-tech did not play a major role in that decline, which was caused both by the launch of domestic oil projects approved prior to Obama’s inauguration and by a sharp decline in driving since 2008.
Obama also sought today to turn oil companies into scapegoat for oil prices. “It is outrageous, it’s inexcusable” that oil companies receive an estimated $4 billion a year in business-related tax breaks, he said.
Cutting those subsidies would likely spur oil prices, Kish said.
However, short-term oil prices could be reduced by a credible presidential commitment to oil-sector investment, he added.
In July 2008, gas prices dropped by 6.3 percent to $136 per barrel during a short speech by former President George W. Bush, in which he promised to open new coastal zones to oil exploration.
A presidential commitment to oil exploration could quickly drive down prices, said John Felmy, chief economist at the American Petroleum Institute. For example, he said, prices could be shifted by “a serious speech about aggressively moving forward on a five-year plan” that would open new onshore and offshore drilling opportunities.
Currently, the futures market predicts auto-related oil prices will drop only slightly by election day.
Republican leaders, however, have been surprisingly cautious when criticizing Obama’s price-raising policies, which have helped double the price of gasoline since his inauguration.
Boehner today said he thought Obama wants cheaper gas, even though the president hasn’t publicly called for cheaper gas since his 2008 campaign.
However, at least one GOP official has suggested that Obama wants to raise oil prices. “Obama said he wanted a gradual adjustment in gas prices,” said Wayne MacDonald, chairman of the New Hampshire Republican State Committee. “Translation: $4.00 per gallon is fine, as long as the increase is slow… [and] if you think $4.00 per gallon is accepted, just wait,” MacDonald said today in a press conference arranged by the Republican National Committee.
Although Obama’s curbs on oil energy have aided the green-tech industry, they have hurt his poll numbers, particularly among middle-income swing voters in the Midwest, who are spending an increasing share of their after-tax income on commuting costs.
Obama recognized that political pain today, saying he is directing his deputies to remove short-term bottlenecks in supply and counter possible “speculation” in oil prices.
“Every time we can find something right now, we’re going to do it, but over the long-term, an all-of-the-above [green-tech development] strategy requires the right incentives,” he said.
Obama did not say whether those incentives include higher prices for rival oil energy.
A drop in the price of oil would be welcomed by drivers and voters but is feared by the green-tech sector, which cannot yet deliver energy as cheaply or efficiently as oil companies.
Many of the green-tech companies are losing money, and many of their investors are worried about losing federal subsidies if Obama loses in November. Numerous green-tech companies — including Solyndra, Fisker Automotive, E123 and Abound — have closed their doors or laid off workers in the last year.
Obama and White House officials are also increasing their criticism of GOP politicians and other groups that support lower oil prices. On Feb. 23, for example, Obama combined a fundraising trip to Florida with a speech in which he ridiculed advocates for cheaper gasoline.
“They’re already dusting off their 3-point plan for $2 gas. … Step one is to drill and step two is to drill. And then step three is to keep drilling,” he said. “Well, the American people aren’t stupid. They know that’s not a plan. … That’s a strategy to get politicians through an election,” he said.
In Nashua, the president again accused critics of partisanship, saying GOP leaders are “licking their chops” because of high gas prices.
Obama’s focus on new technology, rather than lowering oil prices, was highlighted by Energy Secretary Steven Chu in congressional testimony late last month.
Republican Rep. Alan Nunnelee asked Chu whether the administration was trying to lower gas prices.
“No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy,” Chu said. “We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [widening] our supply, and we’ll help the American economy and the American consumers.”
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