Plummeting gas prices aren’t the perfect political gift for President Obama.
Though the White House welcomes the growing consumer confidence that accompanies lower prices at the pump, cheaper fuel leaves Obama in a bind on a major component of his environmental agenda: putting more Americans in fuel-efficient vehicles.
As the price of U.S. oil this week dropped below $50 a barrel and much of the country enjoyed sub-$2-a-gallon gas, many Americans had abandoned plans to purchase smaller vehicles in favor of gas-guzzling SUVs and trucks.
Obama will confront that new reality when he travels to Detroit Wednesday to champion the turnaround of the auto industry. The Ford Motor Co. plant where the president is speaking has been temporarily shuttered because of lower demand for smaller cars and hybrids.
It’s an inconvenient backdrop for a president who has long argued that his environmental initiatives need not take a back seat to his economic prescriptions.
“Really, it’s an odd twist of fate. The president being credited for bringing back the auto industry is now appearing at a shuttered Ford plant,” said Melissa Miller, a political scientist at Bowling Green State University, located in a heavily auto-dependent area in neighboring Ohio.
“He’s possibly being punished for being too green,” she added. “There’s definitely some big irony there.”
Obama will also likely tout a banner year for auto sales, the best since 2006. It’s just that a large chunk of those vehicles clash with Obama’s environmental agenda, as Americans re-evaluate the criteria for what they want in a new car.
The average fuel use of new vehicles sold in the U.S. in December was 25.1 miles per gallon, down 0.7 miles per gallon from the peak achieved in August, according to a new report by the University of Michigan Transportation Research Institute.
“These recent reductions likely reflect the large and continuing decreases in the price of gasoline,” the organization explained.
At the same time, Ford announced that domestic sales of its Focus model had declined by more than 6 percent in 2014, while C-Max hybrid and plug-in hybrid sales dropped nearly 22 percent.
The Obama administration has placed tougher fuel standards on automakers in part because it argued the vehicle manufacturers were ill-equipped to handle surges in the price of oil.
The president has also repeatedly urged Americans to buy the most fuel-efficient cars, or at least smaller vehicles, arguing such purchases would spare consumers the pain at the pump.
“Last year, General Motors sold more hybrid vehicles than ever before. Ford is selling some of the most fuel-efficient cars so quickly that dealers are having a tough time keeping up with the demand,” Obama said during an energy speech in March 2013 in Illinois.
“The only way to really break this cycle of spiking gas prices, the only way to break that cycle for good is to shift our cars entirely — our cars and trucks — off oil,” he added.
Nearly two years later, Obama will make a sales pitch from an auto plant that essentially sent workers home because of the low demand for such vehicles.
And as long as gas prices stay low, analysts said, Obama will address an audience less receptive to his message.
“At $2-a-gallon gas, if he comes in talking about fuel-efficient hybrids, people are going to look at him like he’s nuts. They’ll say, ‘You want me to pay $40,000 for that?’” said James Williams, an analyst with WTRG Economics. “That’s part of the psychology. We’ve had a three-year run of $100-a-barrel oil prices. Now people want a big enough vehicle they can put their wife and kids in.”
