In a polarized election year, it's hardly surprising that candidates and voters on both sides of the partisan divide blame leaders on the other side for the high cost of gasoline.
Very few in the voting public are prepared to fault the voting public, otherwise known as consumers.
An analysis by The Associated Press in the March 23 Maui News ("Price of crude oil helps feed the driving price of gasoline," Page A4) offered a suggestion that the high prices are related to demand, although not in the normal economic equation of pricing based on supply and demand. When prices were rising, U.S. oil production was increasing; production fell when prices fell. That is, pricing led production.
The analysis also noted that consumers apparently believe Congress and the president can make a difference, but American politicians have little control over the oil market.
"Politicians can't do much to affect gasoline prices because the market for oil is global," the AP said.
Nevertheless, the Gallup Poll reported in March that 65 percent of Americans surveyed believe Congress and the president can take steps to keep the price of gasoline from rising, versus 31 percent who accepted that gas prices are out of their control (www.gallup.com/poll/153176/Gas-Force-Major-Life-Changes.aspx).
Unfortunately, the Gallup survey did not also ask what steps Congress and the president could take to control gasoline prices. Critics blaming the Obama administration for higher gas prices aren't all that clear about what they would do either, beyond allowing the Keystone tar sands oil pipeline or encouraging more domestic oil drilling - long-term projects that would have no effect on short-term oil prices.
As for arguments that the United States needs to increase oil production, it has been - from a low of 299.4 million metric tons in 2008 to 335.7 million metric tons in 2010, according to the Organization for Economic Cooperation and Development.
U.S. production still is well below what it had been 40 years ago, when 527.7 million metric tons were pumped out. But global production made up the difference, steadily growing from 2.5 billion metric tons in 1970 to peak at 3.97 billion tons in 2008 ("OECD Factbook, 2011-2012").
At the same time, U.S. use of oil has declined since peaking at nearly 7.6 trillion barrels in 2004 and 2005, to 6.9 trillion barrels in 2011, according to the U.S. Energy Information Administration (www.eia.gov).
There are many reasons for the rising price of oil, the most obvious being speculative bidding by commodities traders over expectations of supply disruptions from Middle East conflicts. The EIA cites the multiple issues in its Jan. 5 "Week in Petroleum" review, including the threat of conflict with Iran while global demand continues to grow.
Fellow Maui News blogger Harry Eagar postulates that price increases in the U.S. stem from reductions in refining capacity ("Restating the Obvious" blog, www.mauinews.com). The EIA notes that East Coast refineries facing decreased demand have cut capacity but adds that Midwest and Gulf Coast refineries with access to lower-quality Canadian crude oil are increasing capacity.
"The result is that refined product trade flows are being redrawn," EIA said. "In 2011, the United States shifted to net product exporter status for the first time since 1949. The East Coast, however, appears likely to become more dependent on product imports."
Globally, the OECD cited tighter supplies and increasing demand.
"Last year's relatively stable, if elevated, prices have given way to a renewed upward surge, borne of tighter fundamentals, geopolitical risks and myriad market expectations for economic growth, emerging market demand and concerns over the pace at which new supply can be added," OECD said. But if the
global market decides, U.S. consumption is a factor. As prices increased over decades, Americans were as likely to pay the higher price as cut use.
A National Academy of Sciences 2009 report, "America's Energy Future," noted that more efficient use can cut fuel demand, but in the U.S. that has been limited.
"This has been a particular issue in the transportation sector, where efficiency improvements that could have been used to raise vehicle fuel economy were instead offset by higher vehicle power and increased size."
* Edwin Tanji is a former city editor of The Maui News. He can be reached at hakumoolelo@earthlink.net. "Haku Mo'olelo," "writing stories," is about stories that are being written or have been written. It appears every Friday.
