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Analysis:Symbolism and sympathy: Obama's risky gasoline strategy
May 1, 2011 / 12:12 PM / 6 years ago

Analysis:Symbolism and sympathy: Obama's risky gasoline strategy

<p>A gas nozzle is used to pump petrol at a station in New York February 22, 2011. REUTERS/Shannon Stapleton</p>

WASHINGTON (Reuters) - The White House is using mostly symbolic measures to address soaring gasoline prices, but the strategy is failing to resonate with frustrated American voters.

President Barack Obama, whose 2012 re-election bid may be complicated by the high gasoline prices, says he has no simple solution to drive down fuel costs, and his aversion to “quick fix” policy moves reflects that.

His administration has neither tapped strategic oil reserves nor advocated a major increase in domestic drilling, and has not offered to trim taxes for drivers.

Instead, Obama and his advisers have blamed market speculators for pushing up prices, criticized oil companies for reaping record profits, expressed sympathy for consumers and called on world oil producers to raise output -- all while advocating longer-term solutions involving renewable energy and conservation.

“The most important thing we can do is have a long-term strategy to make sure we don’t end up here again,” Heather Zichal, Obama’s top energy adviser, said in an interview.

That strategy includes a push to reduce U.S. oil imports by a third over a decade by increasing domestic production, making cars and trucks more efficient, and fostering biofuels and natural gas.

But focusing on long-term goals holds political risks for Obama as he seeks re-election. He already is seeing his support drop in opinion polls on his handling of the economy.

In a Washington Post-ABC News poll of 1,001 U.S. adults published last week, 71 percent of those surveyed said gasoline prices are causing them serious financial hardship and 57 percent disapproved of the way Obama is handling the economy.

While Obama’s ability to control gasoline costs could impact his chances of re-election, demand for oil from fast-growing countries such as China and India makes it nearly impossible for him to talk market prices down.

“There’s going to be a lot of political wordsmithing over the next few months, and ultimately I don’t think it’s going to work,” said Ken Medlock, an energy expert at Rice University’s Baker Institute in Houston. “I don’t see ... any relief in sight.”

Republicans and the oil industry lobby contend that there is something that can work right away, which they say the Obama administration has thwarted: more drilling.

“We’re the third-largest producer in the world, and yet the signal that this administration is sending is that we’re not interested in producing oil and gas in this country,” said Thomas Pyle, president of the Washington-based Institute for Energy Research, a group that typically promotes the conventional energy industry, including more drilling.

Republicans plan to bring to a vote at least one bill this week in the House of Representatives aimed at bolstering domestic energy production.

SHORT TERM, LONG TERM

The White House argues that drilling is not a panacea for high energy costs, a contention backed up by industry analysts. Obama has called for lawmakers to get rid of $4 billion in subsidies for oil and gas companies, putting that money instead toward renewable energy research and deficit reduction.

White House officials say their short-term approach to the price problem is multi-pronged.

This includes investigating potential price gouging through a group set up by Attorney General Eric Holder, speaking to the public about reducing consumption through “town hall” meetings with Obama, and dangling the possibility of tapping the Strategic Petroleum Reserve.

“We’ve been clear that it is a tool that we have available at our disposal. We are monitoring the situation,” Zichal said of the Strategic Petroleum Reserve, the largest stockpile of government-owned emergency crude oil in the world.

With unrest in the Middle East and North Africa having an effect on oil markets, foreign policy is another instrument in Obama’s toolbox that could be used to affect prices hitting consumers at home.

“Communicating a vision for what (is) America’s policy in the Middle East more clearly, particularly regarding large oil producing states, would help create some more certainty in the markets,” said Trevor Houser, director of energy and climate at the Rhodium Group, which does research for private companies.

Obama said last week that his administration is talking to producer countries about increasing crude output, an echo of the Bush administration, which was not averse to pressuring OPEC into producing more oil.

Pyle and most Republicans say the administration should turn its focus toward boosting deepwater drilling in the Gulf of Mexico, encouraging exploration in Alaska, and approving a new pipeline from Canada.

The White House says activity in the Gulf is continuing, with 23 deepwater permits approved for 12 unique wells since new safety standards were set up after the 2010 BP oil spill.

To ease voter angst, analysts said Obama has to show his concern -- a feeling the White House is eager to project -- even though his options are limited.

“What you try to do is basically show that, hey, I’ve noticed,” said Mark Hansen, a political science professor at the University of Chicago.

“It’s largely symbolic. It’s more an expression of concern than anything that’s going to have a substantive effect on prices that people are paying at the pump.”

Additional reporting by Timothy Gardner; Editing by Russell Blinch and Will Dunham

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