Answers I Wish I Had Heard (part 2)

Here's another audience question from Tuesday's town hall debate, this time on the price of gas, where I believe both candidates missed the boat:

Your energy secretary, Steven Chu, has now been on record three times stating it’s not policy of his department to help lower gas prices. Do you agree with Secretary Chu that this is not the job of the Energy Department?

Here's the answer I wish I had heard:

By a show of hands, who in the audience thinks that the President or the Energy Deparrment has any direct control of the price of gas? 

By a show of hands, who thinks that drilling for oil in our national parks, and off the Atlantic coast, will have any immediate measurable impact on the price of a gallon of gas?

By a show of hands, who thinks that providing additional tax breaks and subsidies to oil companies will lead to lower prices at the pump?

If you raised your hand for any of those three questions, I hate to say it but you don’t understand how gas prices work. To be honest, most of us don't understand this, but here's the truth:  The single biggest contributor to the fluctuating price of gas is speculation, plain and simple. Speculators look at everything -- weather, war, season,  the likelihood that people will be driving, the price of tea in China -  heck, they probably figure in who's going to win the World Series. That's what drives the price you pay at the pump, not policies of my administration or any other. 

And don't forget, if you have a pension or a 401(k) or other investment accounts, you're likely making money off the hugely successful oil industry, which has been raking in record or near-record profits over the past several fiscal quarters.  Do you want me to mess with that?

Look - It’s not federal energy policy that makes gas cost $4.  According to some experts, a change in federal energy policies today would take about a decade to make a difference in the price at the pump.  

Now, we could tinker with the federal portion of the fuel tax – which is just over 18 cents per gallon, higher on diesel.  Of course, if we do that, we have to figure out where to make up that money. And there’s really only two ways to do that – find more revenue somwhere else, or cut spending.  And frankly you've seen what happens when we try to do that.

As president, I could also release some of our strategic oil reserves, but there's a big risk in that, and  it's not one that I want to take. And if I was to do that, what's the threshold? $5 per gallon? $4.50? $2.50? Are we going to agree on that? Is this really a strategic issue for our economy, our country?

What I will do is work towards having that gallon of gas take you farther, help you get more miles per gallon with new fuel standards, so you ultimately would pay less.  What I will work on is opening up drilling for oil and natural gas in a controlled way, so that we can increase our already historically high production and at the same time continue to protect our environment, protect our fishing and recreational industries,our tourism industry - we're talkling hundreds and hundreds of thousands of jobs here -  our drinking water, and so on.   What I will do is ensure we invest in other forms of energy, so that we have the full plate of options available for your car, your business, your home.  What I will do is strengthen our overall economy.

That’s what that a president, working with Congress, the energy industries, research institutions, universities, environmental groups,  can and should do.  But the President does not and should not control the price of gas.