Willard Still Lying About Gas Prices

(Cartoon was found at the blog called brotherpeacemaker.)

Willard Mitt Romney (aka Wall Street Willie) continues to tell lies in an effort to pin some kind of blame on President Obama for the economy (which is actually slowly improving). This time it's one he has told before -- several times. He wants voters to believe that the high gas prices are the fault of President Obama. He knows this is not true, and this time he is called on it by a conservative business-oriented site -- Bloomberg Businessweek. Here is some of what Matthew Philips had to say on that website:

Energy markets are as complex as any in the world. But complexity makes for bad campaign messaging. So Romney has reverted to a simplistic message that more oil production will lead directly to lower gasoline prices. If only it were that easy.

The U.S. is currently producing 6.6 million barrels of crude oil daily, compared with 5 million when Obama took office. The last time the U.S. was pumping this much oil was in May 1995, when the national average cost of a gallon of regular gasoline was $1.17. Today, it’s $3.81. The difference is the price of a barrel of oil. In 1995, a barrel of oil was $19. Today, it is around $92.

According to the U.S. Energy Information Administration, the cost of crude oil makes up 64 percent of the price of gasoline, and refining is 18 percent. Depending on where the oil is coming from, the refiners that produce your gasoline pay different prices. For example, the cheapest gasoline prices right now are in the middle of the country. (Heat map here.) The reason is that refiners there have easy access to all the cheap, domestic crude being drilled in such places as Texas and Oklahoma and Kansas. Most of that crude istrapped, however, and can’t efficiently reach markets on the coasts.

Meanwhile, the places with the highest gasoline prices—California, Oregon, most of New England—are stuck buying gasoline that has been refined from more expensive imported oil, rather than the cheap stuff coming from the middle of the U.S. A barrel of foreign oil priced against the Brent benchmark that gets shipped over from West Africa or the North Sea is currently $20 a barrel more expensive than domestic crude priced against West Texas Intermediate.

High gasoline prices aren’t a production problem; they’re a logistics problem. The U.S. is currently undergoing the biggest recalibration of its pipeline infrastructure since many of those pipes were laid 50 years ago. But here’s the thing: Building more pipes won’t necessarily bring down the price of gasoline. If anything, it’ll make it more expensive on the whole. Once all that cheap domestic crude starts to find more markets, its price will rise, not fall. A commodity that has access to more markets, and thus more demand, will eventually become more valuable.

In the next decade, the U.S. will continue to become more energy independent. That’s a function of higher domestic production but also due to gains in efficiency. That doesn’t mean, though, that the nation will get to a point where it, and Canada, operate in a closed loop, in which we use only what we make, with nothing going out and nothing coming in.

That’s not only a fantasy; it’s also bad policy. Whether it’s natural gas or coal or oil, energy is global, and therefore so are its prices. To say otherwise is to suggest closing markets and limiting global trade. That’s called protectionism. Which, last I checked, isn’t in the Republican tool kit.