The politics of the gas pump

 During George Bush's term in office, the average price of regular gasoline has more than doubled from $1.45 a gallon in 2001 to $3.56 a gallon last week, according to the Department of Energy. And the price is expected to go higher, with some analysts expecting gas prices to reach $4 a gallon this summer.

What does that mean to the consumer? In 2001, it cost about $29 to fill up a 20 gallon tank. Today it would cost $71 to fill up the same tank.

For the commuter who fills up that tank every week, the cost of gas has risen from $1500/year to almost $4,000/year, a $2,500 annual increase in just 7 years.

Given the skyrocketing prices, it's no wonder that voters say that gas prices, and their effects on the economy, are a top concern in the presidential election. Forty two percent of Americans think the gas situation is a "crisis," according to a new Gallup poll released today. And 51 percent think gas prices are a "major problem." When the two numbers are combined, that means 93 percent of Americans are worried about rising fuel costs.

What causes high gas prices?

There are plenty of explanations for the increase in gas prices. Some point to increases in demand in China, India, the Middle East and Russia that have affected the global marketplace. Others point to political instability in the oil-producing Middle East in the context of two U.S. wars in Iraq and Afghanistan. Some blame investors speculating on commodities. While others fault the Democrats who took over Congress in 2006 for not doing enough on energy policy.

Whatever the cause, Americans aren't happy about it and aren't used to paying so much at the pump. But in Europe the prices are even higher. Drivers in the UK, for example, shell out more than $8 (U.S.) per gallon when they go the gas station. Those prices would be staggering to American drivers, but Europeans were paying more than $4 (U.S.) a gallon for gas way back in 2001. That's more than Americans still pay today.

The rise in fuel prices has also caused some suspicion that the two oilmen in the White House, George Bush and Dick Cheney, might have contributed to the steep price hike. Oil was trading at $23 a barrel in 2001. Today it's nearly $120 a barrel, a six-fold increase in 7 years.

Bush-Cheney energy policy

Democrats fault President Bush for not doing enough to create an energy policy that discourages consumption, and Democratic presidential candidate Barack Obama has faulted the Administration for taking sides against the consumer.

Noting that "Exxon Mobil reported more than $10 billion in quarterly profits" the Illinois senator recently attacked Vice President Dick Cheney, who he said "met with the oil and gas companies 40 times. So is it any wonder than that the energy laws that were written were good for Exxon-Mobil but they are not good for you?"

Neither one of the three candidates wants to be too closely associated with George Bush on energy policy. Back in February, when asked by a reporter what advice he'd give to an average American who is faced with the prospect of $4/gallon gas, the President responded: "That's interesting. I hadn't heard that."

But none of the three presidential candidates has a clean record here. Senator Obama is the only presidential candidates who voted for the 2005 energy bill, which passed the Senate 74-26. At the time Obama said the bill was "far from a solution" but called it "a first step toward decreasing America's dependence on foreign oil" because it would doubles ethanol use and invest in clean coal. "I vote for this bill reluctantly today, disappointed that we have missed our opportunity to do something bolder that would have put us on the path to energy independence," Obama said.

Senators Clinton and McCain voted against the bill, and Clinton has tried to use this issue against her rival. "Obama voted for the Bush-Cheney energy bill that that put $6 billion in the pocket of big oil," says a recent Clinton campaign TV advertisement. 

A gas tax holiday for the summer

But Clinton and McCain have their own weaknesses to deal with on the issue. Both candidates support a federal gas tax holiday, which would temporarily eliminate the 18.4-cent-a-gallon excise tax during the busy travel months of summer 2008. Sounds like good politics for American drivers seeking relief at the pump, but the proposal has its downside.

The summer gas tax holiday would strip $9 billion from the cash-strapped federal government and reduce the amount of money available for the federal Highway Trust Fund to rebuild roads and bridges badly in need of repair. And some critics of the proposal argue that the tax holiday would actually increase the cost of fuel by increasing demand.

Clinton and McCain have been accused of pandering to voters with the 3-month tax holiday, just in time for the election, but even some critics acknowledge that the proposal may be "smart politics [but] stupid policy."

Whether that's enough to win an election remains to be seen, but there's one point on which observers seem to agree. No matter who wins the election, gas prices are likely to remain high for the foreseeable future.