Image: A Houston gas station displays its prices with a refinery stack in the background
Pat Sullivan  /  AP
Many people don't expect relief from soaring gas costs anytime soon: Two-thirds say they expect the higher prices will cause financial hardship for them or their families in the next six months.
updated 4/5/2011 2:33:32 PM ET 2011-04-05T18:33:32

Quick: What do these things have in common? Libyan leader Moammar Gadhafi. The Japanese earthquake and tsunami. Wall Street volatility. A cranky, even angry American populace.

Answer: They all have something to do with gasoline.

No matter what happens in the world today, just about everything seems to point back to fuel and the tricky politics that emerge when prices spike.

The links aren't lost on President Barack Obama, and for good reason. Like death and taxes, this cycle is a certainty: Prices at the pump rise, the public's mood falls and the president gets punished.

Listen to him last week when he pressed for reducing the nation's oil imports by one-third by 2025:

"Obviously, the situation in the Middle East implicates our energy security. The situation in Japan leads us to ask questions about our energy sources. In an economy that relies so heavily on oil, rising prices at the pump affect everybody," Obama said. "Businesses see rising prices at the pump hurt their bottom line. Families feel the pinch when they fill up their tank. And for Americans that are already struggling to get by, a hike in gas prices really makes their lives that much harder. It hurts."

Sure, that's true. But there's also much more to it. In an era in which globalization has become a given, gas prices are the most obvious, most closely felt connection between the daily lives of Americans and the larger world.

"Whenever gasoline prices spike, there is enormous political consternation because it's a highly invasive issue," said Pietro Nivola, a senior fellow at the non-profit public policy organization, the Brookings Institution, who studies energy policy and American politics.

Has there been a time in modern history when that's been more apparent than the past few weeks?

Look at what's happened.

  • Populist uprisings swept across oil-rich North Africa, from Tunisia to Egypt and now to Libya, where rebels are in a standoff with Gadhafi that has shut down much of the country's 1.6 million barrels a day of crude exports. Energy traders fear unrest will spread further across the region and disrupt shipments from bigger producers like Saudi Arabia and Iran. That could limit the world's supply when demand is high, boosting costs.
  • An earthquake and tsunami in Japan last month triggered a nuclear emergency, with the Fukushima Dai-ichi plant leaking radiation. The reactor's near meltdown has renewed debate in the United States over nuclear fuel and has raised questions about the vulnerability of some U.S. plants.
  • Oil surged to a 30-month high — more than $100 a barrel — as investors worried that the unrest in Libya and elsewhere would keep crude exports from oil-producing nations off the market longer than expected. On Wall Street, key indexes fluctuated as oil prices soared.
  • Consumer confidence dropped at a troublesome time, just as the post-recession economy was struggling to recover. Gasoline costs were the reason. Experts say if people are forced to pay more for gasoline, they're likely to curtail spending elsewhere and that could further slow already sluggish economic growth.

And none of that even takes into account last year's Gulf Coast oil spill.

Even if there's no proven cause and effect between the latest turn of events, there's a commonality that's not lost on experts and consumers alike.

"It's a combination of trends and luck that have put energy repeatedly at the forefront," said Michael Levi, director of the program on energy security and climate change at the Council on Foreign Relations. "We always are going to be dealing with energy in some form or another because it's the lifeblood of society."

Is it any wonder, then, that a recent Associated Press-GfK poll shows a correlation between rising gasoline prices and the country's more pessimistic outlook?

Gas prices have taken on greater importance to Americans. They rank it above issues including Iraq, Afghanistan, immigration, terrorism and taxes: 54 percent called gas prices a highly important issue to them personally last fall, but 77 percent said that in the latest poll.

GfK Roper Public Affairs and Corporate Communications conducted the poll from March 24-28. It involved landline and cell phone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.2 percentage points.

Many people don't expect relief from soaring gas costs anytime soon: Two-thirds say they expect the higher prices will cause financial hardship for them or their families in the next six months. That group includes more than a third who say gas cost spikes will cause serious financial hardship. This on top of a still-poor economy.

Most are changing the way they live. Three-fourths are cutting back on other expenses, two-thirds are driving less, half plan to vacation closer to home, and almost as many have thought seriously about buying a more fuel-efficient vehicle. Most also are bypassing the most convenient gas station to bargain shop for the lowest prices.

Consumers on average said $2.36 per gallon was a fair price. The national average was $3.65 during the week the survey was taken.

Albert Mercado, a restaurant employee from Wallingford, Pa., is among those feeling more than just a pinch.

"When I swipe my card at the gas pump, it stops at $75 and I'm nowhere near full," says the owner of a 2004 Ford Explorer who lives outside Philadelphia. He adds: "I have not been driving as much."

He now limits his travels to and from work, his son's day care and their home. He saves rather than spends. He hasn't visited his parents, who live a three-hour drive away in New York, for a long time.

And Mercado, 44, has little hope that costs will fall anytime soon if at all. After all, he says, he once worked at a gas station and knows how the price game is played. "Something's got to change. I doubt it will," he said.

So far, Obama's overall political standing isn't suffering any more than it was before this latest surge in gas prices; it's held steady for months at about 50 percent. Even so, his job performance rating on handling the issue of gas prices is at just 36 percent, his lowest rating on any issue tracked in the poll.

"What's different this time is the U.S. economy is still fragile," Nivola said. "If we had a sustained gasoline hike, it would be like imposing a substantial tax on the economy at a very inopportune moment."

Eventually, consumers will look for someone to fault if gas prices remain high. Obama's the likely target, and Republicans, like Sarah Palin, are trying to hasten the blame game.

"His war on domestic oil and gas exploration and production has caused us pain at the pump, endangered our already sluggish economic recovery and threatened our national security," said Palin, the former Alaska governor and 2008 vice presidential candidate who is considering a White House run of her own. "The good news is there is nothing wrong with America's energy policy that another good old-fashioned election can't solve. 2012 is just around the corner."

History, however, offers no certainty that a different president would dramatically change how Americans deal with energy.

For decades, a national energy policy has proven elusive because Republicans and Democrats sharply differ over how to make America closer to energy independent. Progress has been impeded by not-in-my-backyard fights over nuclear plants and wind farms, battles over drilling in the Arctic National Wildlife Refuge and nuclear waste disposal at Yucca Mountain, and election-year sloganeering.

The same cycle has persisted. Gas prices rise, Americans complain and politicians raise alarms.

Consider the words that came out of one president's mouth: "This country needs to regain its independence from foreign sources of energy, and the sooner the better." That was Republican Gerald Ford — in 1975.

Nearly four decades later, Obama said this: "As long as our economy depends on foreign oil, we'll always be subject to price spikes."

He's probably not the last president who will give voice to that notion, given the complexities of the issue. As Levi puts it: "The nature of energy is that it matters because it gets entangled with so many other things. But those other entanglements are what make it precisely so difficult to deal with."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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