It's a Gasser

I'm sure you've noticed that gas prices have been going down lately. As someone with a nasty commute, I appreciate that the cost is going down at a time when prices usually peak. Of course, since it's an election season, there's plenty of speculation about it, including this strange piece from Frank Cerabino the Palm Beach Post that the Star Tribune decided to run today:

Gas prices may be going down to $3 per gallon this summer. It's Obama's fault. At least, it is according to Fox News, which advised its viewers last week to view the falling price as another sign of President Obama's failed presidency.

I was subjected to this dose of misinformation while waiting for my dentist, who apparently likes to show Fox News in the waiting room as a way to pre-numb his patients.

Ah, the old mind-numbed robot bit. Very clever. There's more, of course:

I guess this is what's meant by the "we report, you decide" motto of the network. You get to decide between lower gas prices being another sign of (a) Obama's inability to make American's lives better or (b) Obama's ability to fool the American people while failing to make their lives better.

What's odd is that Fox actually records its programs. So anybody with a modem can do a Google search and see, for example, what the network's political message was a few months ago, when the average price of gas had spiked to $3.93 a gallon.

"Right now, we're headed to $5 a gallon, by the end of summer, $6," Bill O'Reilly opined on his Fox show. Greta Van Susteren was equally gloomy: "Brace yourself, it will only get worse as we head for summer."

And at the time, that seemed like a pretty reasonable prediction. In fact, MSNBC predicted the same thing:

The price of gasoline today is 10 percent higher than it was just two months ago. The average price for a gallon of regular is almost $3.62. Gas prices in January have been the highest ever recorded price for that month. Many economists and energy analysts believe a rise to $4 a gallon is inevitable. But their estimates could be grossly understated. Gas will reach $5 a gallon before the end of the year.

So a lot of people got it wrong. What changed? Back to the original article:

Well, are the Republicans right? Has Obama's so-called "war on energy" depressed the supply of our domestic oil production, therefore making it more expensive during the past three years? "Oil production in the United States has risen dramatically since 2008," Van Doren said. "It's unprecedented."

But that has nothing to do with Obama, either, Van Doren said. It has to do with a boom in America's domestic production of sweet crude oil in places like North Dakota, and in the technological breakthroughs in extracted oil from shale. And that higher oil prices make it worthwhile for oil companies to invest more in production.

"Obama can't take the credit or the blame," he said.

And in the end, he said, it's not about us anyway. "Gas prices are falling now because China's economy is slowing, and when that happens, it has a dramatic effect on raw materials such as oil," he said.

Yep. The North Dakota oil boom is real and it's spectacular. That helps the overall supply. China's demand is down and so is most of the rest of the world's demand. So prices are going down.

But why is China's demand going down? Because the economy is sputtering worldwide. And while you can't hold Obama personally responsible for the state of the worldwide economy, you do need to realize that there are efforts underway right now to strangle the oil boom in North Dakota and elsewhere. And that will have an effect on prices, if we allow it to happen. We'll talk about that as the year goes on.