In Nod to Rising Gas Prices, Obama Discusses Energy Policy

Speaking to students at the University of Miami, in a swing state where gas averages $3.69 a gallon, Mr. Obama said: “Just like last year, gas prices are climbing across the country; this time, it’s happening even earlier. And when gas prices go up, it hurts everybody.”

The president offered what he called an “all-of-the-above” response, based on more domestic oil production, development of alternative energy sources and stricter fuel-efficiency standards.

Drawing a sharp contrast with Republicans and anticipating potential attacks on the campaign trail, Mr. Obama ridiculed his opponents for recycling a “three-point plan for $2 gas.”

“Step one is to drill, and step two is to drill, and then step three is to keep drilling,” he said.

This was the president’s first major effort to tackle an issue that has surfaced in the last few weeks as oil prices have been driven up by tensions in the Middle East, where Iran has threatened to retaliate against the West because of sanctions over its nuclear program.

Mr. Obama seemed keenly aware of the risk posed by oil prices. A previous cycle of price increases played briefly to the benefit of Senator John McCain during the 2008 campaign, when his running mate, Sarah Palin, revved up crowds with the chant, “drill, baby, drill.”

The president said that the United States is producing more oil now than at any time during the last eight years, with a record number of rigs pumping. The White House, he said, was prepared to open new areas in the Arctic Ocean and the Gulf of Mexico to exploration.

But Mr. Obama warned that no amount of domestic production could offset the broader forces driving up gas prices, chief among them Middle East instability and the ravenous energy appetite of China, which he said added 10 million cars in 2010.

“Anybody who tells you we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth,” he said to whoops from the crowd of nearly 1,500.

Mr. Obama’s remarks, tinged with humor and sarcasm, were bluntly political, on a trip that included fund-raising events in Miami and Orlando. But his message was sober: neither he nor anyone else can do much about oil prices, which he said were likely to keep rising.

The White House contends that the public has grown accustomed to these periodic spikes and will credit him for speaking honestly about the underlying economic realities rather than offering “gimmicky” fixes — something he eschewed in 2008.

Still, with gasoline prices nationally about 12 percent higher than a year ago, Democratic political analysts believe Mr. Obama needs to get ahead of the issue quickly. Newt Gingrich, for example promised this week to bring gas down to $2.50 a gallon.

“Four dollars per gallon has typically been the tipping point when people go from complacency to exasperation,” said Geoff Garin, a Democratic pollster, who notes that people have begun mentioning gas prices with increasing urgency in his focus groups.

Gas prices did not figure prominently in the Republican debate on Wednesday in Arizona, where the candidates trained most of their fire on one another. But Republicans in Congress criticized Mr. Obama for not opening more federal land to exploration, and for not approving the Keystone XL pipeline.

“The president would like everyone to forget that gas prices have doubled over the past three years while he consistently blocked and slowed the production of American-made energy,” a spokesman for House Speaker John A. Boehner, Brendan Buck, said in a statement.

Even Mr. Obama, they noted, once referred to his “all-of-the-above” policy as a “hodgepodge.”

Among Mr. Obama’s proposals are opening 75 percent of the nation’s offshore oil and natural gas resources by 2017; fuel-economy and emissions standards for trucks, vans and buses; and an administration effort to prevent bottlenecks in the oil market.

Michael Levi, an energy expert at the Council on Foreign Relations, said, “Any effective energy policy is almost inevitably going to be a hodgepodge.” He credited the president with stimulating production, though he said the rejection of Keystone sent a weak signal.

The American Petroleum Institute, the industry’s lobbying group, said Mr. Obama had restricted opportunities to produce more oil by shortening leases and slowing permit approvals.

The president fired back, repeating his demand that Congress end subsidies for the oil and gas industries.

“It’s outrageous,” he said. “Every politician who’s been fighting to keep these subsidies in place should explain to the American people why the oil industry needs more of their money.”

None of Mr. Obama’s proposals were new, and some were aspirational. He said gasoline and diesel produced from algae could replace up to 17 percent of imported oil. But experts say such fuel is a long way from being commercially viable on that scale.

Joking that he once bought a car for $500, Mr. Obama said that because of new fuel-economy standards, new cars will average nearly 55 miles per gallon by the middle of the next decade.

Mr. Obama struck his own inadvertent blow for fuel economy, by flying to Florida on a Boeing 757 rather than a 747. The bigger 747, which usually serves as Air Force One, was in the shop.

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Rising Gas Prices Give G.O.P. Issue to Attack Obama

White House officials are preparing for Republicans to use consumer angst about the cost of oil and gas to condemn his energy programs and buttress their argument that his economic policies are not working.

In a closed-door meeting last week, Speaker John A. Boehner instructed fellow Republicans to embrace the gas-pump anger they find among their constituents when they return to their districts for the Presidents’ Day recess.

“This debate is a debate we want to have,” Mr. Boehner told his conference on Wednesday, according to a Republican aide who was present. “It was reported this week that we’ll soon see $4-a-gallon gas prices. Maybe higher. Certainly, this summer will see the highest gas prices in years. Your constituents saw those reports, and they’ll be talking about it.”

Iran’s recent warnings of a disruption in the global oil trade have pushed the price of a barrel of domestic oil to more than $103, a six-month high and up about 34 percent since September. That has helped drive the average price of a gallon of regular gasoline in the United States to $3.52, a 30-cent increase in the past two months. It is already approaching $4 in some places.

Economists say the current price of oil is only a modest drag on the economy. But a big jump — combined with tensions over Iran and continuing European debt worries — could present a more significant challenge to America’s recovery, they say.

For the president’s economic team, the specter of such increases in oil prices comes on the heels of positive economic news that has lifted Mr. Obama’s approval rating, including better-than-expected job growth, a surging stock market and a payroll tax deal that will put more money in the pockets of millions of Americans.

But Mr. Boehner’s message to his members echoes the aggressive talk coming from the Republican campaign trail, where the men vying for the right to challenge Mr. Obama are increasingly blaming Mr. Obama’s administration for rising gas prices. A gallon of gas had dropped to $1.89 when Mr. Obama took office in 2009, in large part because of the fall in oil demand caused by the financial crisis, and has almost doubled since.

“They want higher energy prices. They want to push their radical agenda on the public,” Rick Santorum said at a campaign event last week, accusing Democrats of pushing alternatives to oil. “We need a president who is on the side of affordable energy.”

Newt Gingrich wrote on Twitter on Friday that “gasoline prices are unacceptable. We can do better!” He urged his supporters to sign a petition on his Web site calling for a return to $2.50-a-gallon gas. “Drill here. Drill now. Pay less,” the petition says.

And talking points from the Republican National Committee that go out to conservative commentators every Friday often include rising gas prices among the “Top Line Messaging” for the week. A recent “Pundit Prep” document cited the national debt, unemployment and the price of gas as the three best ways to define the “Obama economy.”

The president’s political advisers are bracing for battle as they envision the price of gas rising steadily through the summer, as it usually does. As the president’s motorcade whisked him through scenic Orange County on Thursday on the way to a California fund-raiser, one sign held by a protester read, “Gas prices up 91 percent under Obama.”

Aides say they know the attacks are inevitable. But they also say they are prepared to respond forcefully with a defense of the president’s energy policies and a critique of the Republican line.

“The president is keenly aware of the impact that higher gas prices have on families trying to make ends meet,” Jay Carney, the White House press secretary, said last week.

For Mr. Obama’s economic team, the increase in oil prices is an unwelcome reminder of how global events largely outside their control can hamper a recovery. For the third year in a row, a modest recovery faces head winds as winter turns to spring.

In the spring of 2010, debt crises in Europe, slowing stimulus spending and weakness in the housing market brought an abrupt halt to a brief turnaround in the United States economy. A year later, turmoil in the Middle East, the earthquake and tsunami in Japan and more debt problems in Europe did the same. Now, rising gasoline prices, concern over tensions with Iran and, once again, European debt are causing worries.

Binyamin Appelbaum and Annie Lowrey contributed reporting.

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