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Christine's blog: The truth about high gas prices
March 16th, 2012
03:57 PM ET

Christine's blog: The truth about high gas prices

I'm going to tell you a little secret.

Presidents can't really set the price of gas short-term. And maybe not long-term either.

Sure, you've heard otherwise on the campaign trail. Newt Gingrich says a vote for him is a vote for $2.50 gas. (Picking up from where Congresswoman Michele Bachmann left off.) President Obama calls those campaign promises about gas prices "phoney," oil traders laugh, and economists shrug.

The way I see it, there are maybe five quick ways to lower gas prices quickly.

1) A depression.

2) Peace breaks out between Iran and Israel and the U.S. immediately lifts sanctions.

3) The U.S. drops every one of its clean-air rules.

4) China goes 100% solar overnight.

5) We drain the Strategic Petroleum Reserve dry.

None of those things is happening anytime soon. On point #5, the President did it last year when Libyan supplies were off the market. That helped for a hot second. The risk, of course, is that oil markets see a move on the SPR as a bullish signal, and it just drives prices up further.

Then there is this uncomfortable fact: gasoline demand has been down in the U.S. recently. How can demand be down and prices are up? Because headlines from the Middle East and growth in emerging markets matter more than American demand.

We are entering a period in history when the United States is not the only engine that moves the needle on the global economy. It matters just as much if China, Brazil, India and other emerging markets are guzzling as much oil as we are.

Sure, presidents and governments could RAISE gas prices quickly if they wanted to by taxing it. Beyond that, their control is much more subtle and long-term.

If the controversial Keystone pipeline had been passed, gas prices would probably be exactly where they are now. (That's not to say it's not a good idea to diversify our crude supplies and focus on North American sources. And investments in renewable energy are long-term, costly and as we saw with Solyndra's bankruptcy - political.

What's also political? Drilling. The GOP wants more drilling on federal lands and accuses the White House of slow-walking Gulf drilling permits.

"Do not tell me we're not drilling," President Obama counters. "We're drilling all over this country."

The White House reports the highest domestic oil production in a decade. True. But industry insiders credit policies already in place before this administration.

So where does that leave us?

Bottom line for you: The only thing simple about gas prices, is presidents don't set them. But we certainly feel them.

Richard Florida, the author of "The Great Reset," says "Increasing numbers are walking or biking to work or downsizing that house. If we want to make the American economy thrive, we have to make the American economy less oil dependent and that means the most important thing the president can do and we can do is change the way we live."

What do you think about the politics of gas prices? Weigh in, we want to hear what you think and we'll read your comments on the show.

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