A Project of The Annenberg Public Policy Center

Obama Wanted Higher Gasoline Prices?


Republican presidential candidates Mitt Romney and Newt Gingrich have repeatedly lifted several quotes out of context to allege that President Barack Obama and his administration actually wanted to drive up the price of gasoline, and have succeeded.

  • Gingrich said Obama wants gasoline prices to get to the European levels of $9 or $10 a gallon, but that “he just wants it to be gradual.” But that’s not what Obama said. Rather, when asked in 2008 about then-$4 per gallon gasoline prices, and whether that could be a good thing to encourage people toward alternative energy, Obama responded that he “would have preferred a gradual adjustment” because “the fact that this is such a shock to American pocketbooks is not a good thing.” He said nothing of wanting to goose gasoline prices to European levels, gradually or otherwise.
  • Romney has repeatedly claimed Obama said during the 2008 campaign that under his energy policy, energy prices would “skyrocket.” “And they have,” Romney said. But Obama was talking about electricity, not gasoline. And the cap-and-trade plan he endorsed to limit carbon emissions — which died in the Senate in 2009 — included provisions aimed at protecting consumers from higher prices.
  • Gingrich repeatedly has cited a comment Energy Secretary Steven Chu made in 2008 about wanting to boost the price of gasoline to encourage fuel conservation. But Chu made that remark before the 2008 election and before Chu became energy secretary. Upon joining the Obama administration, Chu said it would be “completely unwise to want to increase the price of gasoline.”

With gasoline prices inching toward $4 per gallon (they stood at $3.88 per gallon for regular unleaded on March 22), Gingrich and Romney have not only blamed Obama for the rising cost of gasoline, they say it was part of his stated plan.

What Romney and Gingrich Say

In an interview on Fox News Sunday on March 18, Romney was asked by host Bret Baier if he believes President Obama is to blame for high gasoline prices.

Romney, March 18: Well, there’s no question but when he ran for office, he said he wanted to see gasoline prices go up. He said that energy prices would skyrocket under his views, and he has selected three people to help him implement that program.

On the campaign trail on March 19 in Illinois, and again in a Google+ “hangout” on March 20, Romney repeated the claim:

Romney, March 19: There’s one promise he made that he kept. You see, when he was running, he talked about how his energy policies would cause energy prices to skyrocket.

And when told that gasoline prices had jumped, he said he’d rather see them go up gradually.

Romney, March 20: The doubling of gasoline prices obviously follows a presidential policy which had been to see energy prices rise.

You may recall that the president famously said back when he was a candidate that under his energy policy, energy prices would skyrocket. And they have.

And he also was asked about the rise in gas prices. He said, “Well. I’d rather see it change gradually.”

In both addresses, Romney said Obama has apparently had an “election year conversion” and that he now wants to bring gasoline prices down.

Here’s the Gingrich version. He was asked by Charlie Rose of CBS’ “This Morning” on Feb. 21 whether he believes Obama wanted higher gasoline prices:

Gingrich, Feb. 21: Of course he does. C’mon Charlie, you know that. He has said it himself. Chu, his secretary of energy, said in 2008 he wanted gasoline prices in America to get to the European level, which is $9 or $10 a gallon. Last year, the president said people shouldn’t complain about higher gas prices — they ought to buy more efficient cars. The president himself said he wants to get there, he just wants it to be gradual.

There are three comments at the heart of these claims, two by Obama and one by Steven Chu, Obama’s secretary of energy. We’ll address each one separately.

The ‘Gradual’ Comment

The claim that Obama wanted to see gasoline prices rise “gradually” comes from comments Obama made in an interview with CNBC’s John Harwood on June 10, 2008, when gasoline was $4 a gallon.

Harwood, June 10, 2008: As difficult as this is for consumers right now, is, in fact, high gas prices what we need to let the market work, a line incentive so that we do shift to alternative means of energy?

Obama: Well, I think that we have been slow to move in a better direction when it comes to energy usage. And the president, frankly, hasn’t had an energy policy. And as a consequence, we’ve been consuming energy as if it’s infinite. We now know that our demand is badly outstripping supply with China and India growing as rapidly as they are. So…

Harwood: So could these high prices help us?

Obama: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money into their pockets, but also by encouraging the market to adapt to these new circumstances more quickly, particularly US automakers, then I think ultimately, we can come out of this stronger and have a more efficient energy policy than we do right now.

It’s true that given the opportunity, Obama did not dismiss the notion outright that higher gasoline prices might be a good idea to create incentives for people to switch to alternative energy sources. But the context of the question was that gasoline had risen to $4 per gallon. The rapid rise in the price of gasoline was, he said, “such a shock to American pocketbooks” and “not a good thing,” and that he would have preferred that they had risen more gradually. That’s different from advocating for gradually higher gasoline prices in the future.

By way of further context, Obama had just dismissed Sen. John McCain’s gasoline tax holiday as a short-term gimmick. Obama said long term, the only way to lower gasoline prices was to change the way Americans consume oil, and that as president he would invest in alternative energy and raise the fuel efficiency standards on cars (both of which he later did).

The ‘Skyrocket’ Comment

Romney is also off base with his claim about Obama’s prediction that energy prices would “skyrocket” under his policies, and that we are seeing the fruition of that now at the gasoline pump. Obama’s “skyrocket” quote was part of a discussion about cap-and-trade as a means to reduce greenhouse gases.

There’s no question that curbing greenhouse gas emissions would bring about higher energy prices. Obama, speaking to the editorial board of the San Francisco Chronicle on Jan. 17, 2008, said electricity costs (not gasoline prices) would “necessarily skyrocket” as a result of capping emissions levels, and that his job as president would be to convince the public and Congress that benefits outweigh costs. “If we can’t make that argument persuasively enough, you can be Lyndon Johnson, you can be the master of Washington, you’re not going to get that done.”

On June 26, 2009, the House passed the American Clean Energy and Security Act (H.R. 2454), a greenhouse gas cap-and-trade bill, by a vote of 219-212. The bill included allowances to electric companies to protect consumers from increases in electricity bills. But the bill died in the Senate. And so, of course, it couldn’t have driven up gasoline prices. Romney has lifted Obama’s quote out of context and applied it to a wholly different topic, gasoline prices.

Chu’s ‘European Level’ Comment

Gingrich repeatedly has cited Energy Secretary Steven Chu’s 2008 comment on gasoline taxes as evidence that Obama’s policies are to blame for high gasoline prices. In one such recent instance, Gingrich was asked by Charlie Rose of CBS’ “This Morning” whether he believes Obama wanted higher gasoline prices.

Gingrich, March 20: Of course… you know that. He has said it himself. Chu, his secretary of energy, said in 2008 he wanted gasoline prices in America to get to the European level, which is $9 or $10 a gallon.

Did Chu really say that? Yes, but he said it before he became energy secretary and before Obama won the 2008 presidential election. Shortly after becoming energy secretary, Chu said it would be “completely unwise to want to increase the price of gasoline.”

Gingrich is referring to comments Chu made to the Wall Street Journal in September 2008. In a Dec. 12, 2008, article, the Wall Street Journal said Chu “has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.” The story noted the interview with Chu took place in September 2008, when Chu was in charge of the Lawrence Berkeley National Laboratory in California.

Chu, September 2008: Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.

Note that the context in the story was a discussion of gasoline taxes. The story immediately went on to note that Obama “has dismissed the idea of boosting the federal gasoline tax, a move energy experts say could be the single most effective step to promote alternative energies and temper demand. Mr. Obama said Sunday that a heightened gasoline tax would be a ‘mistake’ because it would put ‘additional burdens on American families right now.’ ”

In April 2009, as secretary of energy, Chu was asked about his 2008 interview with the Wall Street Journal at a congressional hearing on Earth Day. He told Congress he rejected the idea of raising taxes or taking any steps that would raise the price of gasoline.

Rep. Cliff Stearns, April 28, 2009: Last September, you made a statement that somehow we have to figure out how to boost the price of gasoline to the levels in Europe, which at the time exceeded $8 a gallon. As secretary of energy will you speak for or against any measures that would raise the price of gasoline?

Chu: As secretary of energy, I think especially now in today’s economic climate it would be completely unwise to want to increase the price of gasoline. And so we are looking forward to reducing the price of transportation in the American family. And this is done by encouraging fuel-efficient cars. This is done by developing alternative forms of fuel like biofuels that can lead to a separate source, an independent source of transportation fuel.

Stearns: But you can’t honestly believe that you want the American people to pay for gasoline at the prices, the level in Europe?

Chu: No, we don’t.

Gasoline taxes remain at 18.4 cents per gallon, unchanged since 1993.

— Robert Farley and Eugene Kiely