On Tuesday, in South Carolina, Republican Presidential Candidate Michele Bachmann made a proclamation to potential voters.
"The day that the president became president gasoline was $1.79 a gallon. Look at what it is today. Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen."
Of course many of us are used to these sort of promises. They give us something that we want and just keep pouring it on thinking we fully believe in it. However, is this just an empty promise or is there actually something to it? Can it be done?
The $1.79 she's talking about was actually in December the year before Obama was inaugrated. A mere $.02 difference than when he actually became President, a slight mistake on her part but the point is still the same. What is important to note about these prices is that they were so low because of a massive recession, the worst we've had since the Great Depression. With the previously high cost of gas earlier in the recession, demand was far too low. In order to generate demand the price per barrel of oil was reduced significantly, allowing more people to buy.
Knowing this, how can Bachmann really lower the price of gas? One of the proposed methods was to get more oil. Bachmann has preached the need to drill in shale and to open our coasts to more drilling. Both, however, will not solve this problem. Shale drilling is far too expensive and if the price per barrel becomes too low than it becomes completely unprofitable, making it an extremely disfavored option to those who actually understand the oil industry. Coastal drilling is a standard practice today, but there isn't nearly as much oil as people seem to think. According to a study in 2009 by the U.S. Energy Information Administration, opening all of our shores to drilling would increase production by 500,000 barrels a day by 2030. The U.S. alone currently consumes nearly 19 million barrels per day, and that will only increase by 2030.
Bachmann then is left with very little options. Can she put a cap on gas prices? Not only is that a terrible idea, but it will cause untold amounts of problems with the oil industry. Send the world into another depression? That's an even worse idea.
One option does come to mind, a very Keynsian strategy that obviously is against every the current Republican party stands for. A program by the government to pay the difference in the price per barrel so that the American public would only have to less than $2 per gallon of gasoline. It would work as an interesting demand-side project as it gives more money to the people and increases demand all around. This is, however, the only substantial solution and the one that would recieve the least support from Bachmann and her fellow Republicans.
So why make the promise? Simply because people who don't know these things eat it up like no tomorrow.