In all the back and forth over high gas prices we've heard about global markets, supply and demand, unrest in the Mideast, falling value of the dollar, etc. If the article linked below is accurate, another major factor is our transportation and refining system for oil. If that's true, construction of the Keystone XL pipeline would, irrespective of other factors, put downward pressure on gas prices. On March 5, the crude oil coming out of the Canadian oil sands, called Western Canada Select, closed 40% lower than Brent crude, which is the benchmark price for oil in Europe.
Obama's obstinacy on Keystone is puzzling. He must know that high gas prices will hurt him politically. Yet today he personally lobbied Senate democrats to vote against a measure that would have increased the likelihood of building the pipeline. Equally puzzling is his insistence that getting rid of Big Oil "subsidies" is somehow part of a rational energy policy. If Big Oil was denied these "subsidies" (which in reality are sensible writeoffs that other companies get), what do you think would happen to the price of gas? He denies wanting gas prices to rise "in an election year" (based on past statements he's OK with such price increases otherwise), yet he is not willing to do anything that might ease upward pressure on these prices. He and Energy Secretary Chu and other democrats claim that increased supply, if it comes from the U.S., will not have an effect on gas prices. But apparently increased supply from elsewhere would be helpful, since they beg other countries, like Saudi Arabia, to ramp up production. I'm starting to think that the Holy Grail of green energy has rendered the administration incapable of rational thought.
The Story Behind U.S. Gas Price Pain
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