The Bullpen

Why you're wrong about gas prices and politics

Think gas station owners are raking it in? Think Republicans loathe renewable energy? Think again

Paul Brandus

I recently wrote about the many myths and misunderstandings Americans have about gas prices, oil companies, and the presidency. A few folks got upset because the facts and figures I mentioned weren't what they wanted to hear. But as John Adams said: "Facts are stubborn things." With that in mind, here are a few more myths and misunderstandings — about gasoline, renewable energy, politicians — and the facts:

Myth #1: Presidents have major power over gas prices
Gasoline prices have more than doubled on Obama's watch, from $1.89 on Inauguration Day in 2009 to last week's $3.93 (AAA data). That's an increase of 107 percent. But guess what? Gas prices skyrocketed 387 percent between 2002 and 2008, when the average price of regular went from $1.06 to $4.11, before dropping again before Obama took office.

So if you blame Obama for gas prices doubling, then who do you blame for gas prices nearly quadrupling in the six years before our Democratic president was sworn in? And why was gas, at $1.89, so cheap when he took office, anyway? Credit (or blame) the crippling recession of 2007 to 2009, which saw millions thrown out of work and demand for gasoline crater. It's the same reason gas was just $1.06 back in 2002, following another downturn. Of course, a nasty recession and near economic collapse is not the way we want to lower gas prices. But that's what happened.

Image removed.
(Chart courtesy of Doug Short.)

When gas prices exploded from 2002 to 2008, Democrats — including then-Sen. Obama — were wrong to blame George W. Bush, just as Republicans are wrong to blame Obama for the 107 percent jump since 2009. So who can we blame? The "blame," if that's the word, lies largely with the ever-changing market cycles of supply and demand — not just in the U.S., but around the world.  I know, I know. It would be so much simpler if you could just blame one person for the rise in global commodity prices. But that's not how it works. Sorry.

Myth #2: Gas station owners are raking in profits
For people who lazily blame the most visible person in the country — the president — for their problems, the guy who owns the gas station down the street is also a convenient target.

Think those gas station owners are raking it in? Think again. Profit margins on gasoline were about three to five cents a gallon in 2011, according to the National Association of Convenience Stores, whose members sell most of the gasoline in the U.S. It doesn't matter how much each gallon of gas retails for — the per-gallon profits are the same. And a few pennies per gallon isn't exactly a get-rich-quick scheme.

What gas station owners really want you to do is come inside and buy coffee and soda. Like a restaurant, the profits are in the drinks. Just ask the lady in front of me at 7-Eleven recently. She was whining incessantly at the poor guy at the cash register over gas prices — while forking over the equivalent of $14 per gallon for bottled water.

Myth #3: Renewable energy is a joke
Miss this story the other day? The BBC reported that Scotland now gets one-third of its electricity from renewables. Energy Minister Fergus Ewing says "great progress" is being made and that Scotland is on track to meet its goal of getting 100 percent of its electricity from renewable energy by — get this — 2020.

Impressive as that is (I'm always eager to tout my beloved Scotland), it's nothing compared to Brazil, whose 200 million people now get 85 percent of their energy from renewables (mostly hydropower). After the oil shock of the 1970s, Brazil got serious about cutting its oil habit (it once imported 77 percent of its needs). Over several decades — while America dithered — Brazil switched most of its cars to run on biofuels, and today imports no oil at all. Imagine: No need to drill, baby drill — unless it's for export.

But this isn't to say the U.S. is a laggard. America produces about a quarter of the world's renewable energy. Local, state, and federal tax incentives, as well as state-mandated goals, are slowly but surely working. Land owners in deep-red Texas are raking in the green from wind power, and the U.S. solar market grew 67 percent from 2009 to 2010, claims an industry trade group. And don't forget geothermal energy; the U.S. produces more electricity from this source than anyone else. Like gas prices, renewable energy is politicized to death, but… facts are stubborn things.

Myth #4: Democrats love renewable energy and Republicans hate it
In 2009, I asked President Obama when he'd install solar panels on the White House roof. Three years later, still no panels. The president talks a good game, but in 2009, with control of both the House and Senate, he gave up on climate change and cap-and-trade. No doubt, Republican obstructionism played a role — but so did deep opposition in Obama's own party, with coal state senators like West Virginia's Jay Rockefeller and Indiana's Evan Bayh refusing to support the president. The reality, TIME reported, was that "Democrats were almost as obstructionist as their Republican colleagues."

And who's leading the charge on Capitol Hill for tax breaks for wind power? Republicans from the "wind belt" states of the Midwest. And why not? In Iowa, GOP Rep. Steve King says, wind supports as many as 5,000 jobs  — and produces 20 percent of the state's electricity.

Who else sounds like a tree hugger? The first President Bush just bought a Chevy Volt for his son, Neil. And the second President Bush has a ranch in Crawford, Texas, that's completely off the grid. Laura Bush says she and W save tons of money and "it's good for the Earth." Perhaps they're among the 53 percent of Republicans who favor more federal funding for alternative energy, according to a recent Pew Research survey. Not bad, though far behind the 83 percent of Democrats who do.

Gas prices, renewable energy, Republicans, Democrats. Things are never as simple or as clear cut as they seem. These aren't black and white issues. There are some in both parties who love renewable energy — and some who don't. It depends on where they’re from, what industries are in their state, and frankly, how stuffed their pockets are with lobbying cash.

Facts are stubborn things.


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