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Heritage Foundation Research Fellow David Kreutzer on Obama’s energy policies’ impact on rising oil prices.
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Pain at the -- continues average price of gallon gas three dollars and 89 cents and the president recently blaming oil speculators for our nation's surgeon prices.
Who's really at fault though is President Obama pinning the blame on others for his own failed energy policies and -- -- Research fellow at energy economics and climate change at The Heritage Foundation welcome to the -- David great to have you here.
What do you say please -- may -- the president the comments about speculators.
I think has got exactly wrong.
He has energy policies that are anything but friendly to low gasoline prices.
Cancel leases the first couple of weeks of his administration.
Have canceled or put on hold XL pipeline -- was a no brainer we should be getting wanted to cap and trade.
Have -- secretary of energy who doesn't even own a car.
And it's like his advisors had to put some screws on sued to get him to say -- want recanted his desire for eight to ten dollar.
Dollar a gallon gasoline that is set well it is that I wanted everything they do the job.
Yeah they showed the liquidity on the side of the American people on the one hand but on the other hand you talk about ten dollar a gallon gas.
That puts most American families in big big financial trouble.
Look I would have a lot says he says there's nothing we can do nothing we can do about high gas prices you mention a couple of things you make mention.
-- trans Canada pipeline -- Keystone Pipeline.
Additional drilling what else can we do to bring debt down these costs.
What we are -- things we should have been doing over the past several years we shouldn't have had a moratorium and the Gulf of Mexico extended beyond what his own science advisors said.
For a longer period of time we would be getting more oil from there we should be speeding up those permits.
We should be speeding up the permits on federal land instead of slow walking -- and in video with technicalities.
We should be moving forward to get more petroleum and and this -- from and -- From other federal lands.
-- so there are a lot of things he could be doing it obviously won't make a difference in the next couple of days but the things that he should have been doing for the past several years that would be making a difference now.
Things he should do now that would make -- difference in the future.
Well you know it's interesting you bring up man -- you bring up Alaska.
We had senator Lisa Murkowski on last night and she said and you know one of the major reasons that drilling.
There was prevent it is because people said hey it's gonna be ten years until we get that oil.
If it did it did so even meaningful but that's not true is -- I mean this is the kind of thing that takes a long time.
In some places it may take ten years we have on the heritage blog a set of videos of senators ten years ago talking about how it's gonna take ten years.
It is the same places they're saying it's gonna take ten years now what we should get going on that.
Other places it won't take ten years we see on private land in the -- up -- North Dakota.
They've tripled production and about -- its -- you look at the -- Vernon Texas -- oil field that's pretty much played out.
New technology dramatically increasing production.
That's coming on line very quickly they should be doing that sort of thing where they can instead of saying we can't do anything.
We know what's interesting about that I think is this president seems to be in favor of high tech his version is Green tech and but there's cutting edge technology going on in the energy space as you just alluded to.
It should only be in favor of this kind of technology is well this seems to be producing jobs lowering energy -- -- for Americans.
Absolutely there there's phenomenal increase in and the technology and oil and gas drilling.
-- -- have directional drilling they can get right to the pocket for the oil is right where the gas is the imaging technology is phenomenal.
You know -- we're not getting so many dry holes as we used to that this hydraulic fracturing.
Is really been critical to this dramatic expansion of drilling in the US.
None -- -- credited to the president you look at the kinds of drill rigs.
In the federal land the core of the vertical drills as opposed to the horizontal ones would say -- -- fracturing.
The drilling in the not -- could fractured wells that's down 43% from pre recession -- -- The hydraulic fracturing drilling is up 89%.
So where it has an impact drilling is down where it doesn't have an impact drilling is way up.
And is that new technology and that that may be what saves us in spite of his policies when we may have.
Private initiative overcoming some of these government to -- hurdles but those hurdles should not be there.
Well it and isn't that the way it always -- the private sector picking and the pace here.
A -- ticketed test though -- devil's advocate here for somebody's at about speculators that they're unfairly targeted here.
Isn't it true though that speculation the number of contracts purchased on the -- prices of energy particularly well concert of the roof and partly it's because.
I think professional investors have had a hard time finding a place to invest and now you find the hedge fund industry.
Is in the business of betting on the future of oil prices and at the end of the day the person who's left out in the cold -- the -- you know American family.
Maybe but there's somebody else that apparently is going to be left out in the cold.
These speculators and the people they deal where they're sophisticated people on both -- of this market.
So that the argument that speculators are driving the price up and they're keeping get there requires a never ending string of -- to take the other side of those -- Every -- a speculator makes money on a contract somebody that -- on the contract has to lose money.
And -- to change the price of gasoline at the pump.
Something has to be done to slow down the flow of fuel through the system.
They they can stored in some places but there's limited capacity for that.
And so really the speculators can play around a lot but if they're not change in the amount of gasoline available at the gas pumps they're not change in the -- Well in front and that really can't say what -- -- -- quick question here isn't the real market manipulation going on here by the Federal Reserve.
I yeah I don't think so I mean I don't think that's what I know some people say -- we had a gold standard you know -- that the price of oil in terms.
Yeah that is keeping rates low as long as they've been awhile.
A way you can you can get bubbles in a lot of places and assets for that real estate -- we've seen that but what.
Though the fundamentals and oil -- we saw that spike in 2008.
It was because spare capacity worldwide dropped dangerously low below a million barrels a day that is -- the amount of cushion we had in the system.
We're getting a small cushion right now.
The inventories are building up it looks like we've we've might have weathered the worst of it but you -- now.
But that that the fundamentals are doing a pretty good job of predicting this price they did in 2008 they're doing it now.
Interest rates and not so much we'll Democrats say thanks for coming on the show and I really appreciate your time -- to come -- --
