Monday :: Apr 24, 2006

GOP Facing Political Justice Over High Gas Prices

by Steve

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We were being told as recently as two weeks ago that the run-up in gas prices was driven not by an inadequate supply, but by commodity speculators, worried about the possible impact of an attack on Iran. Since then, Iranian ministers have said that they would not use oil as a weapon, so now the White House and industry, speaking in tandem as they always seem to do, are now saying the problem isn’t with speculators worried about George’s mindless saber-rattling on Iran, but rather with inadequate supplies and refining capacity. The White House cannot even admit there may be price gouging going on, rather they pivot and say that if such gouging is going on, they’ll wait for the Federal Trade Commission and Abu Gonzales to take a break from chasing down porn to find it. So what happens today, as the White House tries to blame Democrats, a lack of supply, and a lack of domestic refining capacity for the run-up in prices? Energy traders lock in their gains and dump energy stocks today, giving credence to the argument that to some degree, this has been about profit opportunities and speculation. Yet OPEC says that prices will return to an upward trajectory because of regional tensions.

Put another way, OPEC is saying that as long as Bush stupidly keeps reacting to the latest “Pay attention to me!” craziness from the Iranian president, Big Oil is happy. For heaven's sake Mr. President, the guy is an attention-seeking loon who is using you for domestic consumption; ignore him. It's pretty pathetic to find out your saber-rattling against Iran is part of your new Chief of Staff's "recovery plan" for you to appeal to the base this fall, while gas prices head through the roof as a result of your juvenile behavior. (Oh, I forgot, you don't read polls.)

Naturally, any argument about supplies allows the White House to rant once again about ANWR drilling, something that won’t deliver oil to the United States at all for years, if then, and would only do so in small amounts. Bush will bash the Democrats for being part of the problem, even though Bush, Big Oil, and his own party have been in charge of Washington for the last five years, and haven’t done a thing to deal with the supply problem except to chant ANWR over and over again. Bush also doesn’t want you to notice that members of his own party oppose ANWR as well. Again, after being in power for five years, Bush is in no position to blame others for any supply shortfalls, when the Chinese and Indians are able to cut deals right under our noses to obtain all the supplies they need during these last five years, and OPEC says all demand is currently being filled.

As for refining capacity, this is an all-too-familiar red herring from both Big Oil and the White House, which, again, has had five years to work in a bipartisan way on this problem but hasn’t. The failure to address the problem allows both to blame environmental regulations for a problem that has been created by a self-serving lack of investment in new capacity at a time of record profits. More importantly, blaming environmentalists for a shortage of refining capacity at a time of record profits allows both Big Oil and the Bush White House to redirect attention from the real reason we don’t have more domestic refining capacity: a conscious effort by the industry to reduce refining capacity in the 1990’s through mergers, corporate takeovers, and the elimination of refining capacity in order to ensure tighter supplies and higher prices.

Seeing the GOP face the music on high gas prices in a crucial election year is political justice. The White House was hoping to use this issue, like they did immigration, as an electoral club against the Democrats this year, rather than do anything about the problem itself. But like immigration, the GOP will now see a need to do something about the problem out of pure political survival. And talk of a new windfall profits tax from Arlen Specter, at a time when the outgoing Fat Bastard CEO of ExxonMobil is leaving with a retirement package of $400 million while his company does little to develop new refining capacity with their monstrous profits, is fitting. The White House will resist efforts at a windfall profits tax, but due to their Rovian desire to use a problem for political purposes rather than solve it, the Bush Administration will now see its own party move ahead on a tax and leave them behind.

Hat tip to Nico at Think Progress

Steve :: 9:33 AM :: Comments (16) :: TrackBack (0) :: Digg It!