Monday, March 5, 2012

Oil Prices are Obama’s Problem

Oil price increases are a danger to President Obama.  Last year’s mid-year economic slowdown was, at least partially, caused by the run-up in gas prices, and it could happen again as average prices approach $4.00 per gallon ($3.65 on Feb. 24, 2012).  A mid-summer economic slowdown could reverse the President’s recent climb in approval rating and endanger his re-election. 

But gas prices themselves can move polls away from those deemed responsible and toward those out of office.  The last major spike in the summer of 2008 ($4.10) caused Democrats, who had stopped offshore drilling, to rethink their position.  The Colorado Senate race between frontrunner Democrat Mark Udall and Republican Bob Schaffer tightened for one of the few times during the campaign.

Finally, Obama is vulnerable on policy grounds.  Democrats’ energy policy for the first four years of the Administration focused more on greenhouse gases than supplies.  That policy, dominated by cap and trade legislation, did not make it out of Congress.  Grants, loans and tax breaks for green energy have had little impact on energy use thus far.

Obama’s most high-profile energy decision in 2011 was delaying the Keystone Pipeline from Canada to Texas.  The public opposes Obama’s decision.

About two-thirds (62%) of the public have heard about the Keystone Pipeline, and among them 66 percent believe it should be approved.

The administration is playing defense, worried about the economy, voters’ immediate reaction and their policy vulnerabilities.  This is likely to be an issue that gets hotter with the summer driving season.

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