by John M. Curtis
(310) 204-8700

Copyright August 4, 2004
All Rights Reserved.

urning news about spiraling oil prices on its head, Vice President Dick Cheney flashed his Orwellian credentials, blaming Democrats for the current run-up in prices. Cheney flat-out blamed liberals in Congress for not passing his energy plan, something he refused to make public, claiming executive privilege, blocking the minutes of his clandestine energy task force. At the time Cheney met behind closed doors with industry executives in 2001, California experienced soaring prices and rolling blackouts. Back then, Cheney was emphatic, declaring that California had not built enough power plants. In 2001, former California Gov. Gray Davis begged President Bush and the Federal Energy Regulatory Commission to stop market manipulation and price gouging by out-of-state power companies. Since then, dramatic evidence proved that California was indeed fleeced.

      Cheney's back up to his old tricks blaming Democratic nominee Sen. John F. Kerry (D-Mass.) and his running mate Sen. John Edwards (D-N.C.) for today's spiraling oil prices. According to Cheney, if they had only voted for the Bush-Cheney energy plan to drill in Alaska's Anwar wildlife preserve, then oil prices would somehow drop. Forget about the fact that market jitters caused by the Iraq war or that chaos at Russia's oil giant Yukos, since its president Mikhail Khordorkovsky was arrested and the Kremlin takeover, has any effect. Also forget about Saudi Arabia's Oct. 27, 2002 1.6 million barrel cut in oil production, its March 2004 PR that its oil wells were drying up or oil industry propaganda that China was sapping world petroleum reserves. “John Kerry and John Edwards voted no,” said Cheney, blaming Democrats for causing today's mess in petroleum markets.

      Cheney has become the administration's best propagandist, something Edwards will confront when they meet head-to-head in a vice presidential debate. Unless Edwards gets up to speed, he'll look like a choirboy. Cheney now links the war on terror with the run-up in pump prices. “We have to go on offense, we have to go after terrorists wherever they reside,” Cheney told a campaign rally in Hot Springs, Ark., creating the spurious link between terrorism and domestic gasoline prices. “My impression is sometimes the other team is stuck in a pre-9/11 mentality and they haven't made the transition,” said Cheney, implying that Democrats aren't equipped to fight global terrorism. Cheney knows that Bush's chances of a second term hinge on his terrorism credentials. Connecting the war on terror with today's ballooning oil prices makes a tenuous case for Bush's reelection.

      Worldwide oil production is controlled by the Organization of Petroleum Exporting Countries, a cartel responsible for establishing production quotas and influencing market prices. When OPEC cut production in late 2002, the price of crude climbed from about $15 dollars a barrel to it record hit Aug. 3 of over $44. Cheney's energy plan or war on terror have nothing to do with the price of commodities like petroleum. Yet he's acutely aware that voters blame incumbents for runaway pump prices. When OPEC President Purmomo Yusgiantoro, Indonesia's oil minister, announced he would increase production by 1.5 million barrels a day, world oil prices dropped. Minor conservation efforts, plans for energy independence or to increase domestic oil production or, for that matter, what happens in Iraq, have little effect on today's commodity prices.

      Spiraling petroleum prices add to global inflation, as manufacturing and transportation costs must be passed along to consumers. Higher pump prices become a punitive tax on prospective voters, whose belts must be tightened to accommodate family budgets. That, in turn, affects consumers' willingness to open wallets and fuel the two-thirds of the economy linked to consumer spending, causing a potential economic slowdown—all of which are bad news for the White House during an election year. So far, pump prices haven't gone through the roof, but gasoline demand is already down 0.3% in 2004, perhaps reflecting some belt tightening during the peak driving season. “We now are 8.3 million barrels above last year in terms of gasoline, and yet we are 50% higher in terms of price. I'd like some to explain that to me,” Kyle Cooper, an energy analyst at Citigroup Global Marakets.

      Soaring petroleum prices give the White House heartburn heading into November, giving voters another reason to pause. Blaming Democrats for runaway oil prices is a clever stunt but doesn't allay voters' worries about rising fuel costs. Like it or not, the White House usually gets blamed for bad economic news, including higher pump prices. Bush and Cheney were too quick in 2001 to blame California for causing runaway power costs and rolling blackouts. Cheney now fingers Democrats for causing rising energy prices, shifting responsibility away from a White House that gave energy companies a blank check. “We're running on our record,” said White House spokesperson Anne Womack, a growing concern for voters asking whether they're indeed better off than they were four years ago. With the country at war and oil prices too high, the White House needs to send a different message.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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