The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- Campaigning for office, President Obama promised to do something about high gas prices, but now he is denying he can do much about what Americans pay to drive. He is too modest!
In September 2008, Steven Chu said to
The Wall Street Journal
"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe," and Barack Obama picked him for Secretary of Energy.
When President Obama was inaugurated, gas was selling for $1.90 a gallon, and it is now about $4.00. Not quite European levels, but doubling gas prices is a good start.
Mr. Obama says he needs four more years to change America. If he's re-elected, can we look forward to $8.00 a gallon?
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Don't laugh. Obama and Chu are good at the economically imprudent.
They share some rather radical notions that the nation has overinvested in oil and underinvested in solar, wind and other alternative energy sources.
The president has continued bans on drilling in the eastern half of the Gulf of Mexico, offshore on the Pacific and Atlantic coasts, and the richest fields in Alaska, and he has thrown onerous regulatory barriers to drilling where it is still legal.
Yet Obama boasts U.S. oil production is up.
Crude oil prices are now twice what they were in 2005, but domestic oil production has increased a paltry 12% and now stands at 5.8 million barrels a day.
John Hofmeister, former president of
Shell Oil Company
, estimates that opening up U.S. proven reserves could raise U.S. oil production to 10 million barrels a day while still adhering to prudent environmental safeguards.
U.S. oil prices do not move in lockstep with international prices, because refineries are built to handle the special characteristics of the oil produced by their primary sources of supply. Hence, oil sells for less in the U.S. than for example in Europe, and increasing U.S. production would lower refineries' acquisition costs and gas prices.
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Whatever Americans pay for gasoline, increasing domestic production to 10 million barrels a day would cut combined crude oil and gasoline imports in half, saving at least $150 billion a year.