Updated August 18, 2011
Rep. Michele Bachmann (R-Minn.) ran her 2008 reelection campaign almost solely on the issue of high gasoline prices and a promise to bring back $2 gas. Now, in her campaign for the Republican nomination for president, Bachmann is recycling that very issue (scroll down for more information).
Rep. Michele Bachmann (R-Minn.) at the Sartell SummerFest Parade, Saturday, June 14, 2008, promising a return of $2 gas with a “Drill Here, Drill Now” strategy of increasing supply. (Photo credit: St. Cloud Times)
Crude in free-fall, shedding two-third of its value since July
Strapped consumers see falling prices as bit of welcome relief. But some economists warn of the growing risk of a ruinous downward spiral called deflation. Here’s what’s at stake.
Justin Sullivan / Getty Images
Nov. 21, 2008
HOUSTON — Only four months after peaking at an unheard of $4.11 a gallon, the national average price for gasoline tumbled below $2 Friday, its lowest point in more than three years. Yet the global economic contrast between then and now could not be more stark.
On March 9, 2005, the last time gasoline cost less than $2, the Dow Jones Industrial Average closed at 10,805.63. After a huge rally Friday, the Dow closed at 8,046.42.
There was muted joy for consumers wading through an economy that’s almost certainly in recession, with thousands of jobs being lost and mortgage foreclosures continuing to rise to record levels.
On the New York Mercantile Exchange, where oil futures seemed destined to breach $200 a barrel just a few months ago, pessimism was an understatement.
“At this point, all we can say with any degree of confidence is that crude oil … will not trade below zero,” trader and analyst Stephen Schork said Friday in a tongue-in-cheek analysis of the markets swoon.
Crude has been in free-fall, shedding two-thirds of its value since July, and gasoline prices have followed. Some say oil could be headed below $40 a barrel, and gasoline below $1.50.
Motorists in Independence, Mo., on Friday said they were paying $1.37 for a gallon of gas. …
“Its impossible to know exactly how low the price of gasoline will eventually go,” AAA spokesman Geoff Sundstrom said Friday. “Households can, however, reasonably anticipate that lower fuel prices will be the norm throughout the rest of this year and probably into early 2009.”
The Federal Highway Administration reported this week that Americans drove 10.7 billion fewer miles in September than a year ago, the 11th straight monthly decline.
But there’s some evidence that motorists may be heading back to the pump in greater numbers as gasoline prices fall.
MasterCard SpendingPulse reported Tuesday that even though gas consumption last week was down 2.8 percent from a year ago, it was the smallest year-over-year decline in more than two months. …
For traders, there have been only a few good weeks on the New York Mercantile Exchange since crude peaked on July 11, and the past week was particularly bad. … On Thursday, crude fell to levels not seen in three years. …
OPEC lowered production quotas by 1.5 million barrels a day last month, and some analysts predict even lower levels to come out of the cartel’s next official meeting Dec. 17. …
Oil prices have been crushed as the global economic downturn has diminished demand. How low prices can go is anyone’s guess.
“Do not trust anyone in this market who tries to convince you that oil cannot go below $40,” Schork said in his report Friday. “The same way no one had a clue how high prices could go last July, there is no telling how low we can go now.”
Gas prices tanking (NBC Nightly News, Nov. 21, 2008) – Lower gas prices may be giving American drivers a financial reprieve, but they’re a symptom of a very sick global economy. Tom Costello reports. (02:04)
Dec. 5, 2008
Oil prices hit four-year lows Friday as employers cut the highest number of jobs in 34 years. The continuing decline in prices is so dramatic and so sudden that it is raising the prospect that gas prices could soon fall below $1 a gallon.
The worst jobs data in 34 years on Friday just added more fuel to the deepening global recession as U.S. employers slashed a far worse-than-expected 533,000 jobs in November and the unemployment rate rose to a 15-year high of 6.7 percent. …
Rep. Michele Bachmann (R-Minn.) at the Sinclair service station on Century Ave., Woodbury, June 16, 2008, using charts to explain her plan to bring down the price of gasoline to $2 by increased drilling, including offshore drilling and drilling in the Arctic National Wildlife Refuge. (Photo credit: Mark Zdechlik / MPR)
By Michele Bachmann
Oct. 29, 2008
Driving through the district today, gas station after gas station displayed gas prices around the $2 mark. The lowest price I saw today was $2.06 in Elk River. It seems like only yesterday papers and pundits in my district and around the country were mocking the mere notion of $2 gas — but here we are.
What happened the past few months to lower the cost of gas? Several things, but perhaps most importantly, Congress has let the ban on offshore oil exploration and oil shale expire, sending a signal to the markets that the United States may finally be ready to up their supply. …
Gulf CEO: Gas may get back to $1 per gallon (CNBC, Dec. 5, 2008) – Gulf Oil CEO Joe Petrowski tells CNBC’s Melissa Lee that 2009 may bring the return of one dollar per gallon gas. (06:21)
As gasoline prices continue to soar, 6th District U.S. Rep. Michele Bachmann says she has a plan to get back to $2 a gallon. Bachmann, who’s running for re-election to a second term, outlined a strategy Monday to lower gas prices by expanding domestic oil exploration and production. But Bachmann’s chief political rival says the election-year promise is based on bad policy.By Tim Pugmire
St. Paul, Minn. — The national average for a gallon of gas is just over $4. The price at the pump was $3.83 at the Sinclair station on Century Ave. in Woodbury, where Bachmann stood with charts and explained her plan to give motorists a break.
“It is the No. 1 issue that I hear from constituents of mine all across the 6th Congressional District,” she said. “I think it’s safe to say for the bulk of my colleagues as well, they are hearing from their constituents that they’re being negatively impacted by the high cost of energy.”
Bachmann is backing a Republican proposal to address high gas prices, called the No More Excuses Energy Act. The plan would increase the nation’s oil refining capacity and open up drilling in the Arctic National Wildlife Refuge in Alaska.
Bachmann also wants additional oil and gas exploration, more nuclear power facilities and expanded tax credits for alternative fuels.
Bachmann said her $2 a gallon goal would take a few years to reach. But she said passage of the measures would have an immediate impact on prices.
“One thing we need to do is send a signal to the market that the United States is serious about exploring its own resources,” Bachmann said. “The minute we make that announcement and begin to explore American resources, we will see prices start to fall. Because people who purchase energy contract futures get the signal that America is actually going to increase its source of supply.”
Bachmann describes the GOP plan as a common sense approach.
The Democrat who wants to win her congressional seat this fall said the plan is inadequate and shortsighted.
DFLer Elwyn Tinklenberg said he supports additional domestic oil exploration as part of a broad energy plan. But he said more drilling, including in ANWR, would offer only a short-term, stopgap solution. …
Tinklenberg, a former state transportation commissioner, said he doesn’t think a return to $2 gas is possible unless there’s a significant drop in oil consumption.
His energy plan calls for the development of a more efficient transportation system, higher mileage vehicles, alternative fuels and greater conservation.
A recent federal report also raises questions about the price impact of tapping new Alaska oil.
The U.S. Energy Information Administration concluded last month that drilling in ANWR would at best lower the price of a $130 barrel of oil by $1.44. The report said the reduction could also be as small as 41 cents per barrel.
The high price of gasoline has become a major pain for consumers this summer and a major campaign theme for politicians. Sixth District Republican Rep. Michele Bachmann insists gas prices would drop significantly if oil companies could drill in Alaska’s Arctic National Wildlife Refuge. But even some of her fellow Republicans question that approach.
By Tim Pugmire
Minnesota Public Radio
July 22, 2008
St. Paul, Minn. — Michele Bachmann returned from a weekend tour of the Arctic National Wildlife Refuge even more committed to the idea of drilling for oil there.
She shared her experience first with the National Review, writing that ANWR is a treasure trove of energy. Bachmann repeated the message during an appearance on Fox News. During the brief television interview, Bachmann described ANWR as a perfect place for oil drilling.
“It’s perfectly situated because it’s adjacent to the current Trans-Alaska pipeline,” she said. “This is our energy lifeline for the United States. It’s over 800 miles of pipeline. This is only 74 miles away. It would be relatively simple to build a spur line.”
Bachmann is backing a GOP proposal that would open up oil drilling in Alaska, the nation’s coastal waters and other closed areas.
She also favors increasing oil refining capacity, expanding natural gas exploration, building more nuclear power plants and extending tax credits for alternative fuels.
Bachmann has even claimed the overall strategy to boost energy production could bring back $2 a gallon gas.
But much of the first-term Republican’s attention is on ANWR. During a conference call with reporters, Bachmann said oil drilling could be done in a small area with minimal environmental impact.
“This has not been repelling wildlife. This has been a situation where wildlife actually coexists very well, and in fact in some ways, you may say is enhanced,” Bachmann said. “We were told how dramatically the caribou herd has even increased since inputting the pipeline 31 years ago.” …
ANWR drilling is a divisive issue, even among Republicans. Presidential candidate John McCain favors a hands-off approach there. So does Minnesota Sen. Norm Coleman. Coleman said he supports an increase in domestic oil exploration, but not everywhere. He said ANWR drilling is unrealistic. …
Environmentalists and other critics also question Bachmann’s claim that ANWR drilling could soon reduce pump prices.
They cite a recent analysis from the U.S. Energy Information Administration that concluded oil drilling there would take more than a decade to develop.
The agency also estimates the added supply would lower the price of a barrel of oil by no better than $1.44, which means the reduction of the price of a gallon of gasoline would be far less.
Bachmann is running for re-election to a second term. Her DFL opponent, Elwyn Tinklenberg, said he also supports more domestic oil exploration as part of a broader strategy that also lowers oil consumption. But Tinklenberg said Bachmann’s pledge of $2 a gallon gas isn’t realistic.
By Juliet Eilperin and Jon Cohen
June 10, 2010
Just a quarter of Americans back expanding offshore drilling in the wake of the BP oil spill, and most fault federal regulators for the environmental disaster in the Gulf of Mexico, according to a new Washington Post-ABC News poll.
Before the spill, the Obama administration lifted the moratorium on drilling in U.S. coastal waters as a way to address the country’s energy needs. But most Americans now want fewer offshore wells (31 percent) or the amount kept at current levels (41 percent).
Perhaps as a consequence of the spill, public support for oil and gas drilling in general is also significantly lower than it was a year ago. And as Americans have become increasingly skeptical about such exploration, some elected representatives are now questioning what the government is doing to ensure that offshore exploration can take place safely. …
The new Post-ABC poll reveals a widespread perception that poor federal regulation was at fault in the gulf spill. About 63 percent point a finger at inadequate enforcement of regulations, and 55 percent see an overall weak regulatory structure. Even more, 73 percent, blame BP and its drilling partners for the accident. And the same number are calling the spill a major environmental disaster. …
The broad concern about government inaction directly relates to public support for new drilling: Those who see a weak regulatory structure as a reason for the spill are about twice as likely to want to curb offshore drilling than are those who don’t see the need for stricter federal controls.
About half of the poll respondents, 49 percent, now see the gulf spill as part of a broader problem with such drilling. Support for drilling in general has slipped from 64 percent last August to 52 percent now.
The Post-ABC poll was conducted June 3 to 6 , among a random national sample of 1,004 adults. The results from the full poll have a margin of sampling error of plus or minus three percentage points.
GOP presidential hopeful Michele Bachmann blamed President Obama for increasing gas prices and said she would change that. (Photo credit: Somodevilla / Getty Images via CNN.com)
By Charles Riley
August 18, 2011
NEW YORK (CNNMoney) — President Michele Bachmann has a promise: $2 gas.
“Under President Bachmann you will see gasoline come down below $2 a gallon again,” Bachmann told a crowd Tuesday in South Carolina. “That will happen.”
Sure, politicians promise all kinds of things on the campaign trail. But Bachmann, a leading contender for the 2012 Republican nomination, is wading into truly tricky territory.
The price Americans pay at the pump is tied to the crude oil market — a global system largely beyond the reach of Washington. …
“The day that the president became president gasoline was $1.79 a gallon,” Bachmann said. “Look what it is today.”
Of course, that’s not the full story.
When Obama took office, the country was mired in a terrible economic contraction.
“That was in the 4th inning of the greatest recession of our lifetime,” said Tom Kloza, chief oil analyst at the Oil Price Information Service.
During recessions, demand for gasoline plummets as trucks pull off the road, companies cut back on travel and laid off workers drive fewer miles.
“You have to be careful what you wish for because the recipe for cheap prices these days is economic disaster,” Kloza said. …
“We’re going to have to recognize the rest of the world has this increasing appetite for oil,” he said. “If we go below $2 a gallon, it probably means there has been a lot of wealth loss and we are in a deflationary period.” …
Bachmann did not lay out a specific plan to drop prices on Tuesday. But her campaign website says that as president, she would ease restrictions on drilling and roll back federal regulations on the shale gas industry.
While increased oil and gas drilling in the United States may create good-paying jobs, reduce reliance on foreign oil and lower the trade deficit, it would have little impact on gas and oil prices.
That’s because the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the country — and the world — consumes.
Plus, any extra oil the United States did produce would likely be quickly offset by a cut in OPEC production. …
On the Aug. 23, 2011 edition of “Reality Check” on WCCO 4 News at 10, political reporter Pat Kessler fact-checked Rep. Michele Bachmann’s claim that under a President Bachmann, the price of gasoline will drop below two dollars.
Pat Kessler reporting on WCCO
August 23, 2011
ST. PAUL (WCCO) — Minnesota Rep. Michele Bachmann’s pledge to bring back $2 gas has the feel of a “chicken in every pot” political promise. Experts say claims like this are running on empty.
“Under President Bachmann, you will see gasoline prices come down below $2 a gallon again!” said Bachmann, campaigning for the 2012 GOP presidential nomination in South Carolina last week. “That! Will! Happen!”
That statement is highly QUESTIONABLE.
Bachmann says cheaper gas is doable if the US expands domestic drilling from Alaska to offshore. However, even if the US changed its drilling policy immediately, it wouldn’t lower gas prices for many years.
The Energy Information Administration estimates it would be 2030 before there would have a significant impact on the price at the pump.
Promising cheaper gas is a political strategy Bachmann has used before in Minnesota political campaigns.
“This is our goal: to get back to $2 a gallon, ” Bachmann said in June 2008, while running for Congress.
Here’s what you NEED TO KNOW.
Back then, Bachmann called it the “No More Excuses Energy Act” and, like her campaign for president this year, she promised $2 gasoline within 4 years.
“In order to get back to $2 a gallon, there is only one solution. It’s to explore here, and explore now, so Minnesotans can pay less,” she said.
Bachmann blames President Obama for high gas prices, which oil experts say is simply not true for Obama, or any president.
It’s worth noting that in this political season there’s a history of Democrats blaming Republicans for gas price hikes, too.
Now, gas prices are averaging about $3.50. When Obama took office at the deepest point of the recession, prices were at $1.79. That’s when oil experts say demand for gasoline plummeted, and prices dropped.
Watch video: Bachmann Aims to Lower Gas Prices If Elected (02:32)
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