Gasoline and Election Jousting

Who Will Get to Move in here in November?

The war chests are groaning with cash, the leaders are revving their chariots, let the battle be joined. Yes, the death sport known as the U.S. election has begun and the outcome is, as always, too close to call. There will be blood.

Voters cannot say there is no choice between the candidacies of Barack Obama, of Democrat fame and Mitt Romney, nearly crowned to hoist the banner for the Republicans. The visions differ in many ways, including and especially when it comes to environmental and energy policies.

Energy issues promises to be closer to the center of the campaign than at its edges. The issue of gay marriage could well fade, with the Republicans likely keen to move the focus back to the economy and the cost of living, which includes the price of gasoline, a lifeblood of the economy.

Right now a number of commentators give the incumbent president the edge in the race, although a cakewalk is not in the cards. Chris Krueger, an analyst with Guggenhiem,  predicts the battle will be a “street fight,” comparable to the 2004 race.

“Geography is on Obama’s side in the re-election, which is the primary reason that we continue to give the President the edge on re-election, “ wrote Kreuger in a recent report.  “However, this is a very fickle and volatile electorate with the state of the economy the ultimate wild card going into the November 6 elections.”

Romney’s woes are well known. He’s emerged victorious but bloodied from the nomination process. He’s spent a lot of money and been hounded by some of his contradictory positions on the trail and roundly criticized for an awkward persona in front of crowds. But hey, he does get to shake the political Etch A Sketch and start over.

Obama, while holding some important leads in a couple of swing states such as Ohio and Virginia, is most  vulnerable over the economy. He had some wind at his back with a string of good economic numbers earlier in the year, but recently the economy looks to be sputtering and job growth is slowing.

It will be interesting to watch what role gasoline prices will play in the fortunes of the two men.
It was only a few months ago that high gasoline prices were seen as major threat to Obama’s presidency. Gasoline was marching to $4 a gallon and beyond and the theory was voters were going to place the blame squarely at the door of the White House.

A report from the Huffington Post on March 23 was a case in point: Romney called on Obama to fire the administration’s energy secretary, interior secretary and head of the EPA. “No question in my mind that these — I call them the gas-hike trio … are on a mission to drive up the price of gasoline and all energy so that they can finally get their solar and their wind to be more price competitive,” he said.

Indeed a Washington Post poll in March showed the electorate clearly blamed the White House for high energy prices.

If that was true, will lower oil and prices now help the president’s electoral chances? Oil prices have been beating a retreat since early May. The benchmark Brent crude is threatening to go under $110 a barrel after peaking at above $125 in February and March. Gasoline prices have fallen for the past three weeks and now are hovering around 3.73 per gallon, according to American Automobile Association.

Interestingly, gasoline and oil prices followed almost the same pattern last year: prices rose early in the year, then tailed off throughout the summer. Last year’s spike was also further bludgeoned by a coordinated release from the U.S Strategic Petroleum Reserve and other Western consuming countries, a move that could still be taken by the Administration this year.

But as energy prices fell last year, the growth in U.S. employment began to increase, especially in final quarter of 2011..

So if the price slump continues, the Obama team could face a slightly happier electorate as lower energy costs are a natural stimulus for an economy.  It also takes away a talking point for the Republicans that Obama’s energy policies have been a failure and have lead to pain at the pump (as the cliche goes).

As well, Americans are also enjoying 10-year lows in natural gas prices, thanks to the hugh fracking boom that has led to an explosion in supply. This has saved hundreds of dollars for many in recent months.

So in all the coming dustups over social and economic issues, the Obama team may well have an edge over Romney’s knights in the field on energy issues, should energy prices keep trending lower

Leave a Reply

You must be logged in to post a comment.