Skip to main content

Stop finger-pointing on gas prices

By Frank Verrastro and J. Robinson West, Special to CNN
April 3, 2012 -- Updated 1221 GMT (2021 HKT)
Customers pump gas last month at a Shell station in San Francisco, where prices exceeded $4 a gallon.
Customers pump gas last month at a Shell station in San Francisco, where prices exceeded $4 a gallon.
STORY HIGHLIGHTS
  • Frank Verrastro and J. Robinson West say politics has sown confusion on high gas prices
  • The authors say presidents have little to do with spiking gas prices
  • For $2.50 a gallon gas, crude oil would be $50 a barrel, likely due to global collapse, they say
  • Writers: Obama's "all-of-the-above" energy approach makes sense; finger-pointing doesn't

Editor's note: Frank Verrastro is senior vice president and director of the energy and national security program at the Center for Strategic and International Studies. He served in the Carter White House and Energy Department and later was a senior vice president for Pennzoil. J. Robinson West is the chairman of the consulting firm PFC Energy and a former assistant interior secretary responsible for offshore oil policy in the Reagan administration.

(CNN) -- For most Americans, energy policy right now is all about gasoline prices. And given the political claims and counterclaims on this issue being tossed about, it's no wonder that the public is both skeptical and confused. Republicans charge that the president is responsible for higher prices at the pump, and a certain GOP presidential hopeful has even been so bold as to promise a return to $2.50 a gallon gasoline.

How can the average American, already feeling the impact of higher prices, filter through the nonsense and noise?

Critics of the administration are quick to note that when Barack Obama took office, gasoline prices were $1.95 a gallon. But they neglect to note the U.S. economy was in a virtual depression. For purposes of comparison, when President George W. Bush took office in 2001, gasoline sold for an average of $1.55 a gallon. In the summer of 2008, his last year in office, prices exceeded $4.25. In reality, presidents have little to do with near-term fluctuations in gas prices.

Frank Verrastro
Frank Verrastro

Earlier this year, closures of refineries announced in the United States and elsewhere began pushing up gasoline prices well in advance of the coming "driving season." More recent increases are more closely tied to the delicate balance between increased demand growth and concerns related to supply disruptions, including but not limited to concern over Iran.

J. Robinson West
J. Robinson West

The single largest component in the price of gasoline is the cost of crude oil. Federal, state and local taxes as well as refining costs, transportation, retail advertising and the cost of the service station lease also figure in. All things being equal, for gas to cost $2.50 a gallon, the crude oil price would have to be in the $50-a-barrel range (less than half of the current price). And to achieve this anytime soon would likely require a global economic collapse.

With oil at $50-a-barrel it would not be economically viable for oil companies to bear the cost of extracting oil locked up in hard-to-reach places such as the deep ocean or oil sands, where much of the new production is found. Such a price reduction would, in any event, be short-lived, as demand would grow with lower prices while supply languished. For the longer term, the president's goal of doubling fuel economy standards and increasing fuel choices makes eminent good sense: It would make $4 gasoline feel like $2 gas to consumers. Also a very good thing.

Republicans charge that the president has impeded domestic oil production, while Democrats are quick to note that production is at its highest level in years. Here, the facts are on the president's side, as U.S. oil production is at its highest level since 2003 and imports are below 46%. This is truly good news.

Nonetheless, the nit-pickers are quick to point out that much of the recent development has been the result of technology improvements on the part of industry and is largely occurring on private, not federal lands. This too is true. The domestic oil and gas industry has been the source of enormous and valuable technology, innovation, tax and royalty revenues, and new jobs. But production is also up on federal lands as well.

Critics claim that if the president had been more aggressive in promoting domestic development of oil and gas and increasing development acreage over the past three years, domestic production would be significantly higher and gas prices would thus be substantially lower. This assertion is false for a couple of reasons.

The Deepwater Horizon oil spill (for which the president bore no responsibility) necessarily curtailed U.S. offshore production for the better part of a year. Additionally, exploration and production of green field projects take time -- several years, in fact -- and even modest increases on the order of several hundred thousand barrels per day in a 90-million-barrel-per-day world would not guarantee significantly lower prices at the pump.

The president has recently characterized the latest iteration of his energy strategy as an "all of the above" approach, albeit with a continued emphasis on lower carbon sources. This seems to have struck a raw nerve with industry activists and political opponents, even though in 2007 the National Petroleum Council -- and more recently, Republican proposals -- reached the same conclusions.

Similarly, Obama's language emphasizing the need for responsible development mirrors exactly what the industry said in a 2011 National Petroleum Council study and is consistent with the findings produced by Secretary Steven Chu's Energy Advisory Board with respect to shale gas development. Thoughtful debate here may be falling victim to politics and pique. Sloganeering and political infighting should not drive our energy debate when there are real challenges to be addressed.

The bottom line is that we are all in this together. Regardless of your political affiliation, if the nation does well, we are all the better for it. So let's try to find some common ground to advance economic, energy and environmental goals where the opportunities present themselves and stop the petty bickering and finger-pointing. The American people deserve better.

Follow us on Twitter: @CNNOpinion.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Frank Verrastro and J. Robinson West.

ADVERTISEMENT
Part of complete coverage on
July 30, 2014 -- Updated 1941 GMT (0341 HKT)
Stuart Gitlow says pot is addictive and those who smoke it can experience long-term psychiatric disease.
July 30, 2014 -- Updated 1645 GMT (0045 HKT)
Gabby Giffords and Katie Ray-Jones say "Between 2001 and 2012, more women were shot to death by an intimate partner in our country than the total number of American troops killed in the Iraq and Afghanistan wars combined."
July 29, 2014 -- Updated 2357 GMT (0757 HKT)
Alan Elsner says Secretary Kerry's early cease-fire draft was leaked and presented as a final document, which served the interests of hard-liners on both sides who don't want the Gaza war to stop.
July 30, 2014 -- Updated 1158 GMT (1958 HKT)
Vijay Das says Medicare is a success story that could provide health care for everybody, not just seniors
July 30, 2014 -- Updated 1818 GMT (0218 HKT)
Rick Francona says Israel seems determined to render Hamas militarily ineffective.
July 30, 2014 -- Updated 1743 GMT (0143 HKT)
S.E. Cupp says the entrepreneur and Dallas Mavericks owner thinks for himself and refuses to be confined to an ideological box.
July 30, 2014 -- Updated 1311 GMT (2111 HKT)
A Christian group's anger over the trailer for "Black Jesus," an upcoming TV show, seems out of place, Jay Parini says
July 30, 2014 -- Updated 2028 GMT (0428 HKT)
LZ Granderson says the cyber-standing ovation given to Robyn Lawley, an Australian plus-size model who posted unretouched photos, shows how crazy Americans' notions of beauty have become
July 30, 2014 -- Updated 1939 GMT (0339 HKT)
Carol Dweck and Rachel Simmons: Girls tend to have a "fixed mindset" but they should have a "growth mindset."
July 28, 2014 -- Updated 1156 GMT (1956 HKT)
A crisis like the Gaza conflict or the surge of immigrants can be an opportunity for a lame duck president, writes Julian Zelizer
July 26, 2014 -- Updated 1822 GMT (0222 HKT)
Carol Costello says the league's light punishment sent the message that it didn't consider domestic violence a serious offense
July 28, 2014 -- Updated 1251 GMT (2051 HKT)
Danny Cevallos says saggy pants aren't the kind of fashion statement protected by the First Amendment.
July 28, 2014 -- Updated 1852 GMT (0252 HKT)
Margaret Hoover says some GOP legislators support a state's right to allow same-sex marriage and the right of churches, synagogues and mosques not to perform the sacrament
July 28, 2014 -- Updated 1831 GMT (0231 HKT)
Megan McCracken and Jennifer Moreno say it's unacceptable for states to experiment with new execution procedures without full disclosure
July 30, 2014 -- Updated 1744 GMT (0144 HKT)
Priya Satia says today's drones for bombardment and surveillance have their roots in the deadly history of Western aerial control of the Middle East that began in World War One
July 28, 2014 -- Updated 1635 GMT (0035 HKT)
Jeff Yang says it's great to see the comics make an effort at diversifying the halls of justice
July 26, 2014 -- Updated 1555 GMT (2355 HKT)
Rick Francona says the reported artillery firing from Russian territory is a sign Vladimir Putin has escalated the Ukraine battle
July 27, 2014 -- Updated 1822 GMT (0222 HKT)
Paul Callan says the fact that appeals delay the death penalty doesn't make it an unconstitutional punishment, as one judge ruled
July 24, 2014 -- Updated 2225 GMT (0625 HKT)
Pilot Robert Mark says it's been tough for the airline industry after the plane crashes in Ukraine and Taiwan.
July 25, 2014 -- Updated 1510 GMT (2310 HKT)
Jennifer DeVoe laments efforts to end subsidies that allow working Americans to finally afford health insurance.
July 26, 2014 -- Updated 1533 GMT (2333 HKT)
Ruti Teitel says assigning a costly and humiliating "collective guilt" to Germany after WWI would end up teaching the global community hard lessons about who to blame for war crimes
July 25, 2014 -- Updated 1245 GMT (2045 HKT)
John Sutter responds to criticism of his column on the ethics of eating dog.
July 25, 2014 -- Updated 1302 GMT (2102 HKT)
Frida Ghitis says it's tempting to ignore North Korea's antics as bluster but the cruel regime is dangerous.
July 25, 2014 -- Updated 1850 GMT (0250 HKT)
To the question "Is Putin evil?" Alexander Motyl says he is evil enough for condemnation by people of good will.
July 24, 2014 -- Updated 1803 GMT (0203 HKT)
Laurie Garrett: Poor governance, ignorance, hysteria worsen the Ebola epidemic in Sierra Leone, Guinea, Liberia.
July 24, 2014 -- Updated 1349 GMT (2149 HKT)
Patrick Cronin and Kelley Sayler say the world is seeing nonstate groups such as Ukraine's rebels wielding more power to do harm than ever before
July 23, 2014 -- Updated 2205 GMT (0605 HKT)
Ukraine ambassador Olexander Motsyk places blame for the MH17 tragedy squarely at the door of Russia
July 24, 2014 -- Updated 1142 GMT (1942 HKT)
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
July 24, 2014 -- Updated 1853 GMT (0253 HKT)
Les Abend says, with rockets flying over Tel Aviv and missiles shooting down MH17 over Ukraine, a commercial pilot's pre-flight checklist just got much more complicated
July 24, 2014 -- Updated 1317 GMT (2117 HKT)
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
July 24, 2014 -- Updated 1637 GMT (0037 HKT)
Gerard Jacobs says grieving families and nations need the comfort of traditional rituals to honor the remains of loved ones, particularly in a mass disaster
July 24, 2014 -- Updated 1413 GMT (2213 HKT)
The idea is difficult to stomach, but John Sutter writes that eating dog is morally equivalent to eating pig, another intelligent animal. If Americans oppose it, they should question their own eating habits as well.
July 23, 2014 -- Updated 1630 GMT (0030 HKT)
Bill van Esveld says under the laws of war, civilians who do not join in the fight are always to be protected. An International Criminal Court could rule on whether Israeli airstrikes and Hamas rocketing are war crimes.
July 30, 2014 -- Updated 1209 GMT (2009 HKT)
Gordon Brown says the kidnapped Nigerian girls have been in captivity for 100 days, but the world has not forgotten them.
ADVERTISEMENT