The White House has released President Obama’s “plan” for addressing rising gasoline prices. While offering nothing specific in terms of where to attack the problem, the President is focused on “launching a task force dedicated to rooting out fraud or manipulations in the oil markets”.

Additionally, the President has called for an end to the $4 billion dollar tax subsidy granted to oil and gas markets each year. He is equally opposed to the Congress cutting subsidies to green energy (clean, renewable) companies by 70%. That’s it folks. That is pretty much President Obama’s plan for driving down the cost of gasoline.

Oh, President Obama agrees that we need to retrieve oil from home sources, but only if it is done in a responsible and safe manner (as defined by him and his advisors). He claims that oil production during the past year reached its highest levels since 2003. This last statement is correct, but has little to do with Obama Administration policies.

Most of the oil produced in this past year came from leases granted under the Bush Administration; not the Obama Administration. In fact, the Obama Administration has been ramping up efforts to shutdown oil drilling proposed by President Bush:

Bush-era energy drilling leases in Utah canceled:

Administration blocks more Bush-era oil shale development leases:

National Journal: Obama Taking Credit for Bush’s Boost in Oil Production:

Clearly, we have a production problem in the United States, and a great deal of that problem is the Obama Administration and the paralysis of action by what the Obama Administration sees as a Scylla and Charybdis dilemma. On the one hand, the President and his supporters are still pushing for cap and trade policies – directly or indirectly – to reduce the use of oil by keeping us tied to foreign sources, while simultaneously vilifying those sources in order to lower demand further. High prices reinforce the point that foreign oil dependence is bad for Americans and our economy and lip service may help him earn support from some independents, but it does nothing to actually lower prices.

On the other hand, if the President allows additional drilling here at home in response to OPEC and Russian productivity whims and market manipulations, he works to lower oil and gas prices by a variety of means, but in return, he gets what he does not want – business as usual without fossil fuel use reductions. This 2^nd option would most likely serve to reduce prices at the pump and boost his popularity for reelection with independents, but it is also more likely than not to chase away his far left supporters for yet another broken promise.

President Obama and Interior Secretary Salazar have combined to run the nation’s oil production effort in the same way an egg farmer would run his enterprise if he consciously chose to not replace dying hens with new ones. Eventually, his incongruous desire to both produce eggs for profit and to force higher prices by forcing a severe cut at the source leaves both his enterprise (the nation) and his own interests (those of the nation) at risk. It is a fool’s errand that sets sight on the desired end and disregards the potential of damage of not fully comprehending or even considering the means required to get there.

He has ordered to Attorney General, Eric Holder, to begin “rooting out cases of fraud or manipulation in the oil markets that might affect gas prices, including any illegal activity by traders and speculators.” He seems to have forgotten some economic fundamentals, especially with respect to speculators.

Speculators, when they see a potential disruption to supply, such as the danger they see with the North African and Middle East turmoil in oil rich lands, they bet that the price of oil will rise. By making such bets, they do drive up the price of oil. But if government policies allowed for increased domestic production to offset cartel directed reductions or regional oil shipment disruptions, it would allow local markets to better serve local populations by meeting demands at real price levels instead of prospective ones. Did you know that in Venezuela, locals pay only $0.17 per gallon? That’s correct; just 17 cents! Saudi’s pay approximately $0.44 per gallon for their locally produced oil as we make up the difference in real market value by paying over $5.00 per gallon – not cents, but dollars! Can you see how this might be another means to redistribute wealth from rich nations to poorer ones, and as a mechanism of unintended (or perhaps it is intended) foreign aid?

Given aggressive local drilling and oil production, speculators would be betting on the price of oil going lower by selling off their holdings. Speculation in the commodities market works both ways, but the Obama Administration and liberal leaning media would have you believe that the speculator bets only increase prices. But, they actually do serve to lower prices as well under the right set of circumstances. The unpredictability of speculation stems more from government intrusions on markets seeking equilibrium or crises, such as volitility in oil producing regions, than it does from the speculators themselves. It’s not the speculators who are driving the market; it is government policy and market manipulation that drives speculators to bet in a particular direction – and in this case, they are betting high and giving President Obama the scapegoat he needs (along with the greedy oil companies) to turn public opinion in his direction.

Another force that drives up the cost of gasoline is the mandate of the Clean Air Act passed by the Clinton Administration that requires regional blends of gasoline for particular areas (cities, suburbs or rural areas), during particular seasons, based upon particular climate histories to reduce smog and otherwise try to reduce gasoline generate emissions. It is estimated that the number of blends in the United States at any given time can vary from as low as 15 to as high as 55. The most amazing part of that range is that no one; not even the federal government seems to know how many blends come from all U.S. refineries. Part of that is because in addition to federal blend requirements, the EPA has put fear into states and local counties to come up with their own blends to avoid punishments. If the government lifted the blend requirements to just one blend or even the three best blends overall, refineries could produce gasoline more economically and be in better position to ship needed gasoline across states. Here again, speculators would, more likely than not, bet on lower prices.

Finally, the greatest driver of oil prices in today’s market is the indiscriminate printing of dollars. This inflationary practice weakens our currency and as a result, everything costs more; oil, cotton, grain, milk, meat, fruits and vegetables, tires and every other petroleum based products. Printing money to cover excessive spending will be what ultimately gets us to $7.00 per gallon gasoline unless we force politicians to regain control of our budget and spending priorities.

Giving 2 billion dollars in aid to Brazil to drill offshore as we restrict the same activity at home is not wise spending. It does nothing to help our domestic oil supplies, gasoline costs, national security or budgetary needs. It takes rigs that could be used in the Gulf of Mexico and moves them south where they use technology developed by American to extract deep water oil, load it on transports and move it to market for sale – all activities supported by workers that could be American, but who are not – they would be Brazilian (and some others). President Obama is giving 2 billion of our tax dollars to improve the Brazilian economy, to encourage oil company rigs and transport vessels and all of their associated logistics to move overseas and to outsource American jobs. Does the fault rest on the shoulders and conscience of the oil companies? Or is it more appropriately suited for the shoulders of a government that is betraying American workers and the American economy?

Gather the facts for yourself. Try to apply some objectivity and leave the emotional crap that most of those influential people in your life have burdened you with out of their own sense of immoral, guilt driven altruism and decide for yourselves. If you can do that, you certainly don’t need me or anyone else to get you on the path to fixing the mess we find ourselves in.