How Obama controls gas prices

By Katie Kieffer

President Obama speaking at Keehi Lagoon Beach Park.

President Obama speaking at Keehi Lagoon Beach Park. Image credit: “Obama” by Justin Sloan on Flickr via Creative Commons.

A plumpish girl making pizzas behind a counter methodically spreads red sauce on a circle of dough as she vents loudly to the cashier: “Do you drink soda pop? No? Well, I do. They say that pop makes you gain weight. I always gain weight from stress and I’m so stressed out. I don’t have enough money. I need a car for college and I can’t afford one. And gas is outrageous. It’s like $5! I mean, I could buy a bike for $5!”

A few minutes later, the girl hands me my oven-ready pizza without looking up. She is visibly distraught. I feel bad for her as I walk away thinking, “Thanks for ruining our economy, President Obama.”

Obama claims he doesn’t manipulate gas prices. He told Fox News this month: “You think the president of the United States going into reelection wants gas prices to go up higher? Is that—is there anybody here who thinks that makes a lot of sense?”

I say: “Yes, Mr. President, that makes a lot of sense. Your regulations and unconstitutional executive orders have caused the price of gas to skyrocket. So, you do control gas prices. Want examples? I’ll give you five.”

1.) The Department of Insider Trading

Mirror, mirror on the wall, who is the worst inside trader of them all? President Obama.

I think a better name for the Department of Energy (DOE) is the “Department of Insider Trading.” Obama uses the DOE to cut unconstitutional, back-door deals with taxpayer dollars. End result? Rising gas prices.

Obama gave insider seats on the DOE to venture capitalists backing clean-tech firms. Then, his “administration embarked on a massive program to stimulate the economy with federal investments in clean-technology firms. …  $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers,” reports the Washington Post. For example, he threw $535 million in the form of a taxpayer-backed loan guarantee at the now defunct solar firm, Solyndra, that shed over 1,000 jobs.

Like the Department of Education, the DOE is an unconstitutional pet project of President Jimmy Carter. Carter wanted to be king and therefore loved creating extra-Congressional, Cabinet-level agencies. He knew he wouldn’t be able to amend the Constitution to properly give himself control over energy, so he bullied Congress to hand its legislative power over to the executive branch; he signed the DOE into law in 1977.

Since 2008, Obama has utilized the unconstitutional DOE to pass out taxpayer funds to his friends in clean-tech firms that go belly-up. This abuse of taxpayer dollars is effectively an energy tax.

2.) Obama keeps his alternative to oil, clean-tech, expensive

Earlier this month, I was a Power Panelist on Current TV and the host asked: “Why do Republicans hate American companies, such as Chevy and its Volt?” I responded by explaining how President Obama ignores and hurts American companies (think tech companies like Apple and any American company that produces “clean-tech”).

Obama says he supports American clean-tech. Correction: Obama keeps clean-tech unaffordable. You need rare-earth elements to create solar panels, wind turbines and electric batteries for cars like the Chevy Volt. But President Obama keeps the EPA in business. And environmental regulations like those coming out of the EPA put the former world leader in rare-earth production, California’s Molycorp mine, out of business years ago. It is the government’s fault that we stopped producing rare-earths at Molycorp, which is just now chugging back to life under stiff environmental standards.

Today, China produces roughly 97 percent of the world’s rare-earth supply and controls prices, charging $130 a pound for elements like dysprosium. It’s hard to blame China for mining its own resources and wielding its market advantage.

For over three years, Obama did nothing to revitalize America’s rare-earth market. He could have eliminated the unconstitutional EPA. Instead, he made the EPA stronger.

Now that gas prices are skyrocketing because Obama won’t drill for oil and his alternative solution, clean-tech, costs too much, Obama needs a scapegoat. On March 13, Obama filed a legal case on behalf of the United States “against the Chinese government over its reported hoarding of rare earth metals used to manufacture an array of sophisticated products,” reports The New York Times.

Obama says: “We want our companies right here in America. But to do that, American manufacturers need to have access to rare earth materials.” Please stop blaming China, Mr. President. China has no obligation to provide us with rare-earths at a certain price. You are to blame for the rare-earth shortage in America. You expect Americans to give up cheap gas and the safety of SUVs for an expensive and risky clean technology like the Volt, which blew up in flames after government crash tests.

Chevy Volt recharching

Chevy Volt recharging. Image credit: “Plugged in” by Stephen Rees on Flickr via Creative Commons.

3.) Obama blocked Keystone XL

I wrote an entire column explaining how Obama robbed Americans of 700,000 barrels of daily crude, tens of thousands of jobs, energy independence, and lower gas prices—even after the State Department twice declared TransCanada’s Keystone XL pipeline environmentally safe.

94 percent of Americans love Canada, reports Gallup. Unlike most Americans and President Ronald Reagan, who had a thriving relationship with Canada’s Prime Minister, Obama is ostensibly one of the four percent of Americans who dislike our friendly northern neighbor. And, as one of my Twitter followers quipped, this makes Obama a “four-percenter.”

4.) Obama keeps his “boot on the throat” of big oil

Obama keeps telling us that drilling is up. Drilling is only up if the definition of “up” is “down.” If you want dates, I wrote a column with a detailed timeline showing how Obama has kept American oil production down.

Furthermore, Elizabeth MacDonald of Fox Business News reported on March 16 that up to 20 percent of the price you pay per gallon of gasoline goes toward state and federal taxes. So, Obama has the power to slash the price of gas by pressuring Congress to eliminate federal gas taxes.

5.) Obama fans Middle East tensions, raising market uncertainty

Obama loves to blame oil speculators for high gas prices. He should blame himself.

Earlier in his term, Obama created a special task force to “investigate” possible market manipulation of oil prices. But, blaming Wall Street and capitalists for rising gas prices is a political move. The New York Times points out: “…most energy experts see no support for that theory. They point out that traditional market forces, like growing demand from emerging countries, and limited growth in oil supplies, can easily account for the increase in prices.”

Furthermore, there is significant uncertainty in the market and uncertainty drives speculators to bump up the cost of oil. Global unrest in the oil-rich Middle East and anemic production in stable countries like the U.S. force traders to build a ‘”fear premium” of $15 to $20 per barrel…into the price of oil to account for further disruptions…,’ reports the Associated Press.

And Businessweek explains: “Credit Suisse estimates that each 1¢ uptick in a gallon of gas redirects $1 billion of consumer spending away from other goods over the course of a year. Retail sales in 2012 will probably total $4.8 trillion; so a 50¢ jump would siphon away more than 1 percent of those dollars—$50 billion…” that could be spent otherwise in the economy.

Get ready to watch Obama kiss $50 billion away from the U.S. economy. The New York Times reports that: “gas prices could rise another 50 cents a gallon or more, analysts say, if the diplomatic and economic standoff over Iran’s nuclear ambitions escalates into military conflict or there is some other major supply disruption.”

Obama is fanning tensions in the Middle East. More Americans than ever before are dying at the hands of trusted Afghans, not the Taliban. And Afghan President Hamid Karzai, our purported ally in the War in Afghanistan, wants us to leave by 2013. Yet, Obama seems to think he’s the President of Afghanistan and he is hell-bent on keeping our brave men and women in danger until 2014.

Iran controls nearly one-fifth of the world’s oil supply through the Strait of Hormuz. Despite the fact that American intelligence agencies have found zero evidence that Iran is working on building a nuclear weapon, Obama led the West in placing harsh economic sanctions on Iran.

On February 20, oil prices broke $105 a barrel, a nine-month high, because Iran cut exports to France and Britain. Iran perceives American economic sanctions as an act of war and economic sanctions have hurt global prices because they have increased market uncertainty.

Today, the world draws about 35 percent of its oil from North Africa and the Middle East. So, bringing our troops home from the Middle East, approaching Iran more diplomatically and dramatically accelerating U.S. production could help reduce the world’s dependency on oil from high-tension zones, thereby reducing market uncertainty and lowering gas prices.

Obama is not a businessman or a constitutionalist. He doesn’t understand that socialism makes clean technology like wind, solar and electric unaffordable. He thinks it is fine to ignore the Constitution, use ­­­­­­­taxpayer money to reward his friends and stir Middle Eastern unrest. He is responsible for high gas prices. No wonder the late Apple co-founder Steve Jobs warned Obama: “You’re heading toward a one-term presidency.”

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  1. factisfreedom says:

    Neither left or right is telling the whole story on gas prices. Our devaluing dollar has more to do with rising fuel prices than anyone in government cares to admit.

  2. sskefka says:

    I am unsure what these "Rare-earth elements" are but I do know that one mineral used to make solar panels is Silicon Which makes up 27.7% of the earths crust in second place just behind Oxygen…You actually can make solar panels at home for around 200-300 dollars.

    • Kris says:

      Whether or not you can make ammature solar panels at home does not take away from the fact that commercial-grade solar panels require rare earths and we currently are buying rare-earths from China at exorbitant prices thanks to excessive government environmental regulations.

  3. empathologicalism says:

    I hope conservatives really educate themselves about this issue. As a conservative, for example when I listen to Bill OReilly and his ignorant rants about big oil, I cringe. He is not teachable so no one will be able to explain his stupidity to him.
    Conservatives need the oil and gas and petrochemical experts to lay this out for them in context. It’s all interconnected, from oil to fuels to plastics, the new Nat Gas fracking and the changes and jobs it can bring to the US as an entire industry is reborn.

  4. Atomicdawg36 says:

    The last point I want to make is, it sure is FUNNY, how the people that have the wherewithal to do pretty much as they please, can always seem to have a problem with a guy, a President, who want's to help people LESS FORTUNATE than us. What a fearful, frightened country we have become. You guys always talk about the CONSTITUTION, like it is some dead, stone engraved document. It's NOT. There weren't Powerplants spewing billions of tons of mercury in the air and water back in 1776. You know, growing up, I never even HEARD of a nebulizer, I doubt if it was even INVENTED back them, maybe in hospitals, but not in homes. Yet today, 1 out of every 2 or 3 kids that I know of have respiratory problems and has to use a nebulizer. gee…….must be all the sulpher and carbon monoxide mixing with water to create……..GOLD…….yeah, that's it, it's not mercury that's released when you burn coal, it's GOLD. So, yeah, do you think I could fight an Electric Company from spewing hazardous wastes into the air and water on my own, or would I need somebody with deep pockets……like, oh……I don't know……like Uncle Sam… the EPA to defend the common citizen, and the health of my kids and yours ?? But then again, why should YOU worry, I'm sure there aren't any powerplants and chemical factories at the end of the block in YOUR neighborhoods. ME ME ME……….MINE MINE MINE…….that's a sad way to live.

    • Kris says:

      Dear Atomicdawg36, I think you should read the Constitution. Katie consistently defends and explains the Constitution. It sounds like you disagree w/ our Founding Fathers and think that the President should make laws via executive order and unconstitutional Cabinet-level agencies like the EPA. Try re-reading the Constitution and you will see that Katie is not attacking Obama personally at all! She is simply defending YOUR constitutional rights. Katie has objectively critiqued politicians on both the right and the left who behave unconstitutionally, not just President Obama. He IS the President now, though, and he is the one making the unconstitutional decisions in the White House.

    • empathologicalism says:


  5. createdn6days says:

    Beautiful article!
    Why don't we hear more arguments like this from our elected officials? Why don't we hear more arguments like this from commentators on "conservative" news networks?
    Your articles are a breath of common sense and clear thinking!
    Great work!

  6. rothbardian says:

    There is a lot of good stuff in this article. But where is the mention of Bernanke and Greenspan and the Federal Reserve? Certainly credit expansion by the Fed has something to do with the higher price of many commodities.

    It seems to me the institutional problem of having government control over money has more effect on the economy than just one person.

    Aaron Brown
    Radio Free Market

  7. mphailey1 says:

    Hi Katie,

    I'd like to point out a few things about this post.

    I think you should be careful tossing around facts about rare earth mining and it's history in the United States. The mine at Mountain Pass was shut down in the late 1990's in part because of wastewater leaks. Mining and processing rare earth elements is a very capital intensive and dirty business. Most of the deposits contain radioactive elements such as Thorium. The United States was happy to outsource this business to China because the Chinese didn't mind destroying their environment or people its own citizens at risk. Without any environmental restrictions they could mine and refine these elements far cheaper than anyone else on the planet, which along with their large reserves, is the reason the industry moved there. It should be noted that China is now attempting to clean up this industry and reduce pollution and illegal mining. This has restricted supply. This is in part why it has established export quotas. I ask you: would you work in or live near a mine where radioactive waste polluted the nearby environment? You'd probably move or want it shut down like the people near Mountain Pass did over a decade ago. I don't think the US realized the strategic importance of these elements at this time, but this cannot be solely blamed on President Obama. Did Republican president George W. Bush do anything meaningful about this during his two terms? It was a failure at all levels of government. Furthermore, NIMBYism is alive and well in America, especially in my copper-rich home state of Arizona, and blaming the EPA or President Obama solely doesn't do your readers any good.

    You should also take more care in throwing out rare earth prices and element names. The one element you mentioned, Dysprosium, while absolutely critical, is not present whatsoever at Mountain Pass. Additionally rare earth mines, such as Bokan Mountain in Alaska, will have to be built in the US to supply the so-called 'heavy' rare earths of which Mountain Pass is deficient.

    I agree with most of what you wrote, Katie but I think the tone of your article is way too ideological and at times you ranted and raved a bit. I implore you to focus less on ideology and disparaging President Obama. I think your readers will be better served.

    Thanks for considering my comments.

    • Kris says:

      It's odd how environmentalists such as yourself can be comfortable with outsourcing rare earth mining to a place like China that behaves irresponsibly when it comes to mining. The emissions are going to go into the atmosphere one way or the other and outsourcing to China is an easy way for the U.S. to pretend like she is saving the earth even though she is merely handing production over to an irresponsible polluter.

      You clearly did NOT read Katie's article. She pointed out that Molycorp is chugging back into business. You should read the TIME article she cited in her earlier article, Green Tech Needs Capitalism:"

      TIME is a liberal-oriented publication and that lists prices for Dysprosium. You don't list any facts at all. All you have done is criticizing Katie’s facts without even reading the facts she cites. Try reading the articles she cites. I think you will end up agreeing with her. 🙂

  8. Coyote Six says:

    This is a very well researched article. I would just like to know why you don't have a Facebook “like” button so people can share it on FB?


    • Coyote Six says:

      Oh I see. You have a "Tell and Share" button at the bottom. I was distracted by all the shiny baubles on your page.

  9. JEP says:

    Don't forget to take inflation of the monetary supply into account. When compared to the price of gold, the cost of a barrel of oil is actually 75 cents less than the historical average. So, gas is cheap when compared against gold, but because the dollar is so weak, gas seems artificially expensive.

  10. Marie Frances says:

    totally agree with you, Katie – very well researched post!

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