April 12, 2011 > It's a gasoline world: Fuel connections everywhere
It's a gasoline world: Fuel connections everywhere
By Liz Sidoti, Associated Press
WASHINGTON (AP), Apr 05 - Quick: What do these things have in common? Libyan leader Moammar Gadhafi. The Japanese earthquake and tsunami. Wall Street volatility. A cranky, even angry American populace.
Answer: They all have something to do with gasoline. No matter what happens in the world today, just about everything points back to fuel and the tricky politics that emerge when prices spike.
Is it any wonder, then, that a recent Associated Press-GfK poll shows a correlation between the country's more pessimistic outlook and rising gas prices.
The issue also has taken on greater importance to Americans. They rank it above subjects including Iraq, Afghanistan, immigration, terrorism and taxes. Last fall, 54 percent called gas prices a highly important issue to them personally, but 77 percent said that in the latest poll.
Many don't expect relief from soaring gas costs anytime soon: Two-thirds say they expect the higher prices will cause financial hardship for them or their families in the next six months. That group includes more than a third who say gas cost spikes will cause serious financial hardship. And that is on top of a still-poor economy.
Most are changing the way they live. Three-fourths are cutting back on other expenses, two-thirds are driving less, half plan to vacation closer to home, and almost as many have thought seriously about buying a more fuel-efficient vehicle. Most also are bypassing the most convenient gas station to bargain shop for the lowest prices.
GfK Roper Public Affairs and Corporate Communications conducted the poll from March 24-28. It involved landline and cell phone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.2 percentage points.
The underlying links between current events aren't lost on President Barack Obama, and for good reason. Like death and taxes, this cycle is a certainty: Prices at the pump rise, the public's mood falls and the president gets punished.
Listen to him when he pressed recently for reducing the nation's oil imports by one-third by 2025.
``Obviously, the situation in the Middle East implicates our energy security. The situation in Japan leads us to ask questions about our energy sources. In an economy that relies so heavily on oil, rising prices at the pump affect everybody,'' Obama said. ``Businesses see rising prices at the pump hurt their bottom line. Families feel the pinch when they fill up their tank. And for Americans that are already struggling to get by, a hike in gas prices really makes their lives that much harder. It hurts.''
Sure, that's true. But there's also much more to it. In an era in which globalization is a given, gas prices are the most obvious, most closely felt connection between the daily lives of Americans and the larger world.
``Whenever gasoline prices spike, there is enormous political consternation because it's a highly invasive issue,'' said Pietro Nivola, a senior fellow at the Brookings Institution who studies energy policy and American politics.
Has there been a time in modern history when that's been more apparent than the past few weeks?
Look at what's happened.
-Populist uprisings swept across oil-rich North Africa, from Tunisia to Egypt and now to Libya, where rebels are in a standoff with Gadhafi that has shut down much of the country's 1.5 million barrels a day of crude exports. Energy traders fear unrest will spread further across the region and disrupt shipments from bigger producers like Saudi Arabia and Iran. That could limit supply when demand is high, boosting costs.
-An earthquake and tsunami in Japan last month triggered a nuclear emergency, with the Fukushima Dai-ichi nuclear plant leaking radiation. The reactor's near meltdown has renewed debate in the United States over nuclear fuel and raised questions about the vulnerability of some U.S. plants.
-Oil surged to a 30-month high - more than $100 a barrel - as investors worried that the unrest in Libya and elsewhere would keep crude exports from oil-producing nations off the market longer than expected. On Wall Street, key indexes fluctuated as oil prices soared.
-Consumer confidence dropped at a troublesome time, just as the post-recession economy was struggling to recover. Gas costs were the reason. Experts say if people are forced to pay more for gasoline, they're likely not to spend elsewhere and that could further slow already sluggish economic growth.
And none of that even takes into account last year's Gulf Coast oil spill.
Even if there's no proven cause and effect between the latest turn of events, there's a commonality that's not lost on experts and consumers alike.
``It's a combination of trends and luck that have put energy repeatedly at the forefront,'' said Michael Levi, director of the program on energy security and climate change at the Council on Foreign Relations. ``We always are going to be dealing with energy in some form or another because it's the lifeblood of society.''
The poll also indicated a disconnect between expectations and reality. Consumers on average said $2.36 per gallon was a fair price for gas, but the national average was $3.65 during the week the survey was taken.
Albert Mercado, a restaurant employee from Wallingford, Pa., is among those feeling more than just a pinch.
``When I swipe my card at the gas pump, it stops at $75 and I'm nowhere near full,'' says the owner of a 2004 Ford Explorer, who lives outside Philadelphia. He adds: ``I have not been driving as much.'' He now limits his travels to and from work, his son's day care and their home. He saves rather than spends. He hasn't visited his parents, who live a three-hour drive away in New York, for a long time.
And Mercado, 44, has little hope that costs will fall anytime soon. After all, he says, he once worked at a gas station and knows how the price game is played. ``Something's got to change. I doubt it will,'' he said.
So far, Obama's overall political standing isn't suffering; it's held steady for months at about 50 percent. Even so, his job performance rating on handling the issue of gas prices is at just 36 percent, his lowest rating on any issue tracked in the poll.
``What's different this time is the U.S. economy is still fragile,'' Nivola said. ``If we had a sustained gasoline hike, it would be like imposing a substantial tax on the economy at a very inopportune moment.''
Eventually, consumers will look for someone to fault if gas prices remain high. Obama's the likely target, and Republicans are trying to hasten the blame game.
``His war on domestic oil and gas exploration and production has caused us pain at the pump, endangered our already sluggish economic recovery, and threatened our national security,'' said Sarah Palin, the former Alaska governor and 2008 vice presidential candidate who is considering a White House run of her own. ``The good news is there is nothing wrong with America's energy policy that another good old-fashioned election can't solve. 2012 is just around the corner.''
History, however, offers no certainty that a different president would dramatically change how Americans deal with energy.
For decades, a national energy policy has proven elusive because Republicans and Democrats sharply differ over how to make America closer to energy independent. Progress has been impeded by not-in-my-backyard fights over nuclear plants and wind farms, battles over drilling in the Arctic National Wildlife Refuge and nuclear waste disposal at Yucca Mountain, and election-year sloganeering.
The same cycle has persisted. Gas prices rise, Americans complain and politicians raise alarms.
Consider the words that came out of one president's mouth: ``This country needs to regain its independence from foreign sources of energy, and the sooner the better.'' That was Republican Gerald Ford - in 1975.
Nearly four decades later, Obama said: ``As long as our economy depends on foreign oil, we'll always be subject to price spikes.''
He's probably not the last president who will give voice to that notion, given the complexities of the issue. As Levi puts it: ``The nature of energy is that it matters because it gets entangled with so many other things. But those other entanglements are what make it precisely so difficult to deal with.''