Matt Wuerker The perpetual politics of petroleum

The boom-bust cycle of oil politics is booming this week on Capitol Hill, where the only thing more predictable than politicians’ policy solutions are their claims that the other side is ignoring the issue.

With gas prices surging to about $4 a gallon in some places, lawmakers on both sides of the aisle are recycling ... the same talking points they used the last time there was such pain at the pump.


Call for “all of the above?” Check. Demand the White House open the Strategic Petroleum Reserve? Check. Find some old quotes from the other guy about high oil prices? Check.

Rising oil prices are a serious issue, especially with the economy just beginning to recover. And the U.S. Energy Information Administration says prices at the pump will continue to rise because the recent increases in oil prices haven’t been fully passed on to consumers. Gasoline could average about $3.70 per gallon — or higher, depending on the region — in the peak April-September driving season, EIA says.

But Washington’s reaction demonstrates the limits of any policy response — as well as the reality that the issue can be more useful as a political tool.

Here’s what Washington could do to address the high prices — and why it probably won’t.

“All of the above”

This has been the standard Republican battle cry on energy for a couple of years, referring to coal, oil, nuclear, renewables — pretty much anything the speaker wants to include. The GOP is trying to blur the lines between high crude oil prices and the rest of the energy debate, citing the failed Democratic attempt to pass a climate change bill, Obama administration actions on coal mining permits and the Environmental Protection Agency’s objective to regulate greenhouse gas emissions.

Can oil prices be a stalking horse for broader energy legislation?

Some Republicans want to try. Rep. Rob Bishop and Sen. David Vitter are shopping a plan that would expand offshore drilling, open the Arctic National Wildlife Refuge to oil exploration, pre-empt EPA on greenhouse gases and force the State Department to approve the Keystone oil pipeline from Canada, among other things. And 53 House Republicans last week introduced an all-of-the-above “energy road map” that adds Western oil shale and boosts use of coal-based fuel in military vehicles and jets.

A broader bill is difficult, especially with various committees splitting jurisdiction on issues such as energy production and oil and gas drilling. Thanks to the cap-and-trade bill, energy legislation is far more partisan now, turning what was once a bipartisan measure into a hazardous third rail.

POLITICO Grade: 87 (low octane)

“Drill, baby, drill”

Obama has backed down on drilling before, when his campaign was threatened by GOP “drill, baby, drill” cries in 2008. The administration was even willing to study opening additional areas off the Atlantic seaboard and eastern Gulf of Mexico — until the BP oil spill.

Since the spill, Gulf state lawmakers from both parties have blasted the Department of the Interior for what they call a “de facto” moratorium on new offshore drilling permits since the BP spill. (The White House notes Interior has approved 37 new shallow-water permits with revised safety measures since the spill, and this week gave the OK on the first new deepwater well.) Look for another run at ANWR and expanding use of tar sands and other domestic sources.

Problem is, new drilling won’t help the oil supply for a number of years (an argument Democrats and environmentalists have been making for quite a long time — and Republicans are happy to help reporters find those old quotes). Not to mention, there’s little Obama can do that will fully satisfy GOP critics. He’ll be criticized for acting too slowly or leaving some places (like ANWR) off the table.

“There’s nothing the Department of [the] Interior can do at this point in time that will lessen or have a significant impact on the price of oil,” Bob Abbey, director of the Bureau of Land Management, told POLITICO. “We could take actions to lease additional lands right now, but it would be years before those lands could ever be developed.”

POLITICO Grade: 89 (mid-grade)

Open the Strategic Petroleum Reserve

It was created in the event of an oil shortage, such as those seen in the 1970s. But that hasn’t stopped lawmakers — mostly Democrats — from periodically calling for presidents to release some of the current 727 million barrels stored.

Obama called for a limited release — 70 million barrels — at the height of the presidential campaign, but the White House has been cool to the idea of tapping the strategic reserve this year, as have leaders in Congress and off the Hill.

At best, it’s a short-term fix, and it sets a precedent for future presidents to act whenever crude oil prices hit $100 per barrel.

“There’s some concern that if it gets used, it would actually add to this sense of fear and anxiety in the market, because it would suggest that perhaps there’s a bigger problem than there is,” said Daniel Yergin, author of “The Prize.”

POLITICO Grade: 87 (low octane, again)

How about conservation?

Just as diet and exercise are the surefire ways to lose weight, using less refined petroleum is a surefire method for reducing demand. But is it a political winner?

In 2007, President George W. Bush signed a bill that mandated federal fuel efficiency to rise to an average of 35 miles per gallon by 2020 and for 36 billion gallons of renewable fuels to be produced by 2022. And environmentalists are asking the Obama administration to hit a fuel economy standard of 60 mph by 2025. But that’s still a long way off, and worldwide oil demand shows no sign of letting up.

In addition, any calls from the White House to conserve will immediately bring out GOP catcalls of “nanny-state regulations” and Jimmy Carter comparisons, as well as a laundry list of other administration policies that slow fossil-fuel development on any level.

In an academic scenario, some on the left would like to see prices go up because it would encourage conservation and efforts to reduce greenhouse gas emissions. To that end, Republicans are sending around a 2008 line from Steven Chu, now energy secretary, saying U.S. prices should be more in line with those in Europe, where gas is heavily taxed and expensive. But in the real world, Democrats will say they’re concerned citizens with lower incomes would feel the burden of higher gas and food prices.

POLITICO Grade: 87 (more low octane)

Patrick Reis and Darren Goode contributed to this report.