Thursday, September 1, 2011

Michele Bachmann's oil production plan may be bogus, but that's bad news for everyone

Over at the Washington Post, Brad Plumer points out that domestic oil production has skyrocketed in the last few years, even while gas prices have risen. Then he uses this fact to score political points against Michele Bachmann, who is currently campaigning on a promise to lower prices by increasing domestic fuel production.

That's fair enough -- I would never begrudge someone the opportunity to score political points against dumb Republican presidential candidates! -- but the dynamic Plumer is highlighting has implications beyond Michele Bachmann. It also demonstrates just how little control domestic policymakers have over oil prices. Increase domestic production, decrease domestic production, it doesn't matter. The price of gas doesn't really respond to domestic policy.

Plumer says, "It’s almost as if additional U.S. oil production is too small in the global scheme of things to affect prices at the pump in any sizeable way." What he doesn't say is that, "in the global scheme of things," increases in the cost of oil are inexorable. We've used a lot of the oil we know how to reach, and rapid development in nations like China means energy demands will climb ever higher.

These are facts that should keep any politician (or aspiring politician) up at night. Voters care a lot about gas prices, and know immediately when the price rises. Many voters are convinced that politicians have some influence over gas prices. Many voters will punish politicians if prices rise too high. Politicians do not, in fact, have any real control over gas prices. And gas prices are going to go up, and up, and up, and there's nothing Michele Bachmann or Barack Obama or anyone else can do about it.

The solution, obviously, is to promote energy efficiency and alternative energy sources, ultimately reducing the correlation between gas prices and voter dissatisfaction. Instead, Republicans have, if anything, strengthened that correlation, by promising dramatic action to lower prices. It's a promise that will come back to bite them eventually, of course: they've taken it upon themselves to fix a problem over which they have no agency. But in the meantime, politicians of all stripes will face undeserved scorn.

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