Published March 07, 2012
President Obama and Congress tackled the high price of gasoline Wednesday -- and there were two entirely different views of the problem and its solutions.
The president toured a trucking firm that uses natural gas as a fuel, arguing that only alternatives can help us because we produce too little oil to affect the global price.
"There are no quick fixes to this problem," President Obama said. "But listening to them, you'd think there were," he said, referring to critics.
He argued that the U.S. only has 2 percent of the world's oil reserves, but uses 20 percent of the world's supply.
Obama always speaks favorably about natural gas, which is extracted through the same process as oil, either drilling or through what is known as fracking, a practice on which the administration is considering new regulations.
The president repeatedly argued that the U.S. can't drill its way out of high prices.
"Anybody who tells you otherwise either doesn't know what they're talking about or they aren't telling you the truth," Obama saids.
That view is echoed by Rep. Henry Waxman, D-CA, who says "now the Republican mantra is that we need to 'drill baby drill.' This slogan may sound good, but it's based on complete fiction."
In fact, Waxman and other Democrats argue there is nothing the U.S. can do to affect global oil prices.
Many others, however, flatly dispute that.
One expert says high prices are due to vastly increased demand overseas, which has not been matched by increased supply.
"The reason is a mix of voracious, relentless oil demand grown in fast growing asia and middle east on the one hand, and disappointingly small net oil production growth on the other," says Robert McNally, head of the Rapidan Group, a energy analysis firm.
Jack Gerard, head of the American Petroleum Institute (API), says "too many talk like we're powerless to do anything but watch global events drive costs higher, and that there are no solutions," he says. "Members of the committee, that's just not so." API is a trade association that represents America's oil and natural gas industry.
President Obama, however, argues more supply isn't the answer -- that we must lower demand by investing in new technologies for cars, trucks, buildings and factories.
"That's the only solution to the challenge because as we start using less," Obama says. "That lowers the demand, prices come down."
But the oil industry asks why those who say supply doesn't matter keep searching for more supply from elsewhere.
"It's others who have called on the Saudis to produce more," API's Jack Gerard says, "who've called on other sources -- such as the Brazilians and others who recognize supply matters."
He also notes that many Democrats are calling for oil to be released from the Strategic Petroleum Reserve. If they don't think supply makes a difference, he asks, then why try to increase it from others or the reserve?
In fact, it was President Obama who encouraged the Saudis and Brazil to produce more. The president clearly sees the political danger in high prices, but not enough to help American firms produce more as well.