Obama and Energy: Facts to Know (and Share)

Here are some facts about the impact of Obama’s energy policies on American families.


In a June 2008 interview with CNBC reporter Jon Harwood, then-candidate Obama blamed the Bush administration’s energy policy for the cost of gasoline at that time. He also indicated that he was OK with high gas prices as long as the prices raised “gradually,” and also spoke of persuading US automakers to “adapt to these new circumstances.”

At the end of 2008, gas prices had dropped to under $2.00 a gallon. On October 10. 2012, according to AAA’s Fuel Gauge Report,  gas prices in the US averaged $4.42 a gallon.

Since January 2011, gas prices have never averaged below $3.10 a gallon. In 2012, gas prices have averaged over $3.30/gallon the entire year, from a low in January to highs in March and October well over $4.00/gallon.

The difference between a 12 gallon tank of gas @ $2.00/gallon vs. a 12 gallon tank of gas @ $4.42/gallon is $28.80.  The difference between an 18 gallon tank @ 2.00/gallon vs. an 18 gallon tank of gas @ $4.42/gallon is $43.56. According to the U.S. Department of Transportation and EIA, the average U.S. household purchases a little over 1,100 gallons of gasoline per year, so the increases add up – and that’s money coming out of the pocketbook of every American that owns a personal vehicle.

The June 2008 CNBC interview occurred during a short term (3 month) peak in gas prices, and Obama blamed the then-current cost of gas on failed policies in the Bush administration.

After four years of Obama as president, who should we blame NOW?

“Green” Energy

The Obama administration has put a lot of effort into “green energy” programs as a means of pushing U.S. consumers into alternative energy sources. How has that affected middle-class families in the U.S.?

The failure of government-subsidized green energy companies  is a double-sided blow to the middle class. First, well over a billion dollars was given to now-failed energy companies (the linked article lists 15 companies, and the amount of money they were given). That was tax money our government wasted. In addition when these companies failed, thousands of people lost their jobs.

There’s also the impact of bailing out General Motors, and the subsequent push to produce and sell the all-electric Chevy Volt. In 2011, GM only sold about 7,600 Volts.   In 2012, it is estimated that far less than 30,000 Volts will be sold.

On the other hand, state and federal incentives (loans, rebates, grants, and tax credits) have cost U.S. taxpayers more than $3 billion.  This includes not only money given to GM, its subsidiaries, and partners; but also grants to local governments for purchasing the Volt.

Personal buyers of electric cars can take a $7,500 tax credit, but GM has is on record saying that the average annual income of Volt purchasers is $175,000, and other electric cars are much more expensive than the Volt…so, this credit ends up being a tax cut for the rich!

Even with optimistic estimates of the numbers of electric vehicles on the road in the next 10 years, we would only reduce gas consumption by less than 1%.  So, the push to sell electronic vehicles in mass before the technology was ready to be mass-marketed has ended up costing taxpayers heavily, creating another tax shelter for the rich, and not reducing our dependence on foreign oil.

Even the environment doesn’t benefit from pushing this technology to market before it was ready, since it turns out that lithium-ion batteries have a negative environmental impact!

Since Volt sales have been so much lower than originally estimated, middle class families have been directly impacted as plants have been shut down for weeks at a time (such as in March 2012and August 2012). While most of the affected employees are union workers, they and their families are still impacted by the stress of job-related insecurity; especially since reports are have been circulating since August that GM may go bankrupt yet again.

GM is losing as much as $49,000 on each Volt it builds, and with the government now owning 26% of GM, that means that our government has massively lost taxpayer money on this investment.

Coal and Electricity

Early in 2008, Obama told the San Francisco Chronicle that he expected energy prices to “skyrocket” if his cap and trade plan was implemented.  While the proposal did not pass Congress, Obama has used EPA regulations to increasingly strangle the coal industry. Tens of thousands of families in states like West Virginia, Virginia, Pennsylvania, Ohio and Kentucky are being affected by coal producers cutting production and closing mines (Link 1, Link 2, Link 3, Link 5, Link 6).  Coal mining jobs are middle class jobs averaging $70,000/year according to the National Mining Association.  These layoffs also produce a ripple effect impacting the local economy, thereby hurting many families not directly employed by the coal industry. The impact of these job losses is only beginning to be felt at this time, since many of these announcements have occurred in the last two months.

According to a May, 2012 article on FoxNews.com

…the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago.

The state of the coal industry affects the cost of electricity for middle class families, and the cost of other energy sources has risen as well.

And USA Today reported in December 2011:

Households paid a record $1,419 on average for electricity in 2010, the fifth consecutive yearly increase above the inflation rate, a USA TODAY analysis of government data found. The jump has added about $300 a year to what households pay for electricity. That’s the largest sustained increase since a run-up in electricity prices during the 1970s.

Electricity costs have risen an average of 30 cents per kilowatt since 2010, and the 2012 estimate was created  before the impact of mine closings hits the costs of generating electricity.

Heating Oil and Natural Gas

Heating Oil has risen from 2.95/gallon in 2010; the estimate for 2012 is 3.76/gallon. In fact, the U.S. Energy Administration projects that average household expenditures for heating oil  will increase by 19% this winter, and natural gas expenditures will increase by 15%.