Barbour Says Obama Cheers for Higher Gas Prices

Published March 2, 2011

WASHINGTON (AP) — Mississippi Gov. Haley Barbour, a potential presidential contender, accused the Obama administration Wednesday of favoring a run-up in gas prices to prod consumers to buy more fuel-efficient cars.

But the recent rise in gasoline prices has been primarily driven by unrest in the Middle East, particularly Libya, where protests have diminished crude oil production.

Barbour cited 2008 comments from Steven Chu, now President Barack Obama's energy secretary, that a gradual increase in gasoline taxes could coax consumers into dumping their gas-guzzlers and finding homes closer to where they work. Chu, then a Nobel Prize-winning professor, argued that higher costs per gallon could force investments in alternative fuels and spur cleaner energy sources.

"This administration's policies have been designed to drive up the cost of energy in the name of reducing pollution, in the name of making very expensive alternative fuels more economically competitive," Barbour said during a U.S. Chamber of Commerce breakfast across the street from the White House.

In 2008, while the head of the Lawrence Berkeley National Laboratory in California, Chu told The Wall Street Journal that energy prices were the lynchpin to an energy overhaul.

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe," Chu said in September 2008.

The administration has boosted fuel economy and placed the first-ever greenhouse gas standards on vehicles in an effort to reduce the pollution blamed for global warming and wean the country off foreign supplies of oil. Those regulations will result in less gasoline being used, but should have little to no effect on gasoline prices.

Others have accused the administration of driving up prices at the pump by placing certain areas of the country off limits to oil production, and placing a moratorium on drilling in the deepwater Gulf of Mexico after the largest offshore oil spill in U.S. history. Drilling in the Gulf — a major source of U.S. production — has been slow to restart. The first permit for a deepwater well was issued just this week.

Interior Secretary Ken Salazar dismissed the notion that changes in oil production in the U.S. would increase the price of oil.

"What we do here in terms of production is not going to affect the price of oil, which is set on the world market," Salazar told a Senate energy panel examining his department's budget.

Another proposal initially backed by the President Barack Obama would have put a price on carbon dioxide pollution, the chief gas blamed for global warming. The legislation failed in Congress last year, in part because it would have made it more expensive for industries that burn fossil fuels.

Barbour said higher energy costs already hurt workers in his state and any increase would cripple Mississippi's economy.

"In 2008, $4 gasoline brought my state to its knees before Wall Street melted down," Barbour said. "We've blown through $3 gasoline all the way to 4."

Barbour said Obama's energy team wouldn't be happy until gas prices reached $9 a gallon.

Barbour is still weighing a presidential campaign and plans to visit Iowa twice this month. Barbour's advisers say he won't make a decision before the Mississippi legislature ends its session in early April and it could be May before he announces a decision.

In the meantime, though, he has honed his criticism of the president, particularly on economic issues. With pocketbook issues poised to dominate the 2012 election, prospective presidential candidates are focusing their messages on Obama's stewardship of the economy and are seeking to cast his re-election as a referendum on the economy and jobs.

"We don't have a $1.5 trillion deficit this year because taxes are too low," said Barbour, a former Republican National Committee chairman who helped the Republican Governors Association make major gains in November's elections as the group's chairman. "It's because we spend too much."

He then turned his criticism to federal spending, a key concern among the conservatives who have great sway in picking their 2012 presidential nominee.

"This administration spent $7 trillion in the first two years and lost 7 million jobs," Barbour said, then joked it was a good thing the government didn't spend $12 trillion to lose 12 million jobs.

"The fact is: a bigger government means a smaller economy," he said.

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Associated Press writers Matthew Daley contributed to this report.

Written by DINA CAPPIELLO,Associated Press<BR>PHILIP ELLIOTT,Associated Press

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