The Obama administration's new fondness of low oil prices.

On January 20th, 2009 Steven Chu, a vocal climate change activist and Nobel scientist, was appointed by President Obama as Secretary of Energy. Just prior to his appointment Mr Chu was quoted by the Wall Street Journal as saying, “Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.”   In order to fill his roll as secretary representing the interests of the American public, Mr. Chu's fundamental ideology needed to change the moment he was appointed.  Interestingly, Mr. Chu has waited 3 years, long after his comments were publically released and right before an election, to state his new affection for lower gas prices. Two weeks ago in a hearing Rep. Alan Nunnelee asked Secretary Chu if the goal of the administration was to reduce oil prices. Mr. Chu replied an emphatic No!. He then went on to say, the overall goal of the administration is not to get prices down; the overall goal is "to decrease our dependency on oil."

Unfortunately for Mr. Chu's ideology, America has experienced a huge surge in the amount of recoverable oil thanks to fracking technology. No longer are we at the often quoted 2% of proven reserves. We may in fact be the next Saudia Arabia.  Of course, all of this has occurred on permits issues prior to Obama's 2008 election.  Most newer drilling is taking place on private land as the administration had greatly reduced the number of permits approved on public lands.

ANWR, the Canadian Pipeline, slow permitting etc...actions speak louder than words. It's true a president can't directly control global prices but he can choose to apply downward instead of upward pressure on them. He can also choose for the US economy to benefit by producing oil that is being sold at near record prices.

President Obama while giving a smug reply to the question of gas prices said, "Do you think the President of the United States going into re-election wants gas prices to go up higher? Is there anybody here who thinks that makes a lot of sense?”

The key words here are election year.

President Obama is by his actions, very vulnerable on this issue for the 2012 election.