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Obama Faces Swing State Anger Over Gas Prices

Photographer: Haraz N. Ghanbari/AP

President Barack Obama is reflected in a pair of sunglasses as he shakes hands following a speech at UPS Jan. 26, 2012, in Las Vegas. Close

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Photographer: Haraz N. Ghanbari/AP

President Barack Obama is reflected in a pair of sunglasses as he shakes hands following a speech at UPS Jan. 26, 2012, in Las Vegas.

Voters in some U.S. swing states are feeling the pinch of rising gasoline prices more than those in states that tend to vote Democrat, posing a challenge to President Barack Obama’s re-election, according to a report.

Gasoline in Florida, Michigan, Nevada and Pennsylvania costs more than the national average of $3.76 a gallon, Trevor Houser, a partner at the New York-based policy analysis firm Rhodium Group, said yesterday in a report. Consumers in Iowa, New Mexico and Ohio spend more on gasoline as a percentage of their personal income than the national average.

“If you look at those Midwest battleground states, those that haven’t crossed the line to $4 are pushing the limit,” Houser said in an interview. “Midwest battleground states will cross the threshold before the national average does. All things being equal, it’s bad for the incumbent.”

Gasoline has emerged as an issue in the presidential election after prices rose 27 straight days through March 4. Mitt Romney, the former Massachusetts governor who is the leading contender for the Republican nomination, said Obama has slowed the growth of U.S. oil and gas production and should take some blame for rising energy costs. Former House Speaker Newt Gingrich, another Republican candidate for president, has said that Obama’s energy policies “exist in a fantasy world where we’re all going to end up buying an electric car.”

Gasoline in Florida, Pennsylvania, Michigan and Nevada, costs more than the national average of $3.76 a gallon, Trevor Houser, a partner at the New York-based policy analysis firm Rhodium Group, said in a report. Photo: Joe Raedle/Getty Images Close

Gasoline in Florida, Pennsylvania, Michigan and Nevada, costs more than the national... Read More

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Gasoline in Florida, Pennsylvania, Michigan and Nevada, costs more than the national average of $3.76 a gallon, Trevor Houser, a partner at the New York-based policy analysis firm Rhodium Group, said in a report. Photo: Joe Raedle/Getty Images

‘Drill Our Way’

Obama, speaking at a truck manufacturing plant in Mount Holly, North Carolina, yesterday said, “As much as we’re doing to increase oil production, we’re not going to be able to just drill our way out of the problem of high gas prices.”

“Anybody who tells you otherwise either doesn’t know what they’re talking about or they aren’t telling you the truth,” he said.

The U.S. is producing more oil today than at any time in the past eight years, Obama said. Production has risen since he took office in January 2009, according to data compiled by Bloomberg.

Consumers in industrial states face a double threat from rising energy costs, Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based policy-analysis firm, said in an interview. In addition to paying more at the pump, job prospects are more closely linked to energy costs than in Democrat-friendly cities on the East and West coasts.

“It is always an issue in every election,” Book said. “It’s especially important now that this year’s battleground states are industrial states.”

Red Versus Blue

By one measure, gasoline prices are hurting Democrat- leaning states more than those that vote Republican, Houser said. All but three states considered electoral locks for Obama face gasoline prices higher than the national average.

While consumers in Republican-leaning states pay lower prices at the pump, they use more gasoline and spend more for fuel relative to their income, Houser said. Among swing states, voters in Michigan, North Carolina and Iowa spend the most on gasoline relative to income.

“High gas prices are a more important issue for Republicans than Democrats,” Houser said.

In 2011, prices peaked at $4 a gallon on May 6 and then finished the year 76 cents lower. From 1999 to 2011, the average price rose 44.1 cents a gallon from January to June, according to gasoline analyst Trilby Lundberg, president of Lundberg Survey Inc. Prices tend to rise early in the year because of seasonal demand and the higher cost to refine gasoline to meet driving demands in the middle of the year.

Price Increase

“When President Obama took office in 2009, the average price of gas nationwide was roughly $1.80 per gallon,” Representative Ed Whitfield, a Kentucky Republican, said yesterday at a House hearing on fuel prices. “In three years under President Obama, we have seen average gas prices increase almost $2 per gallon. This is unacceptable.”

Obama has said the recent rise in oil prices is caused by instability in the Middle East, including a tense confrontation with Iran over its nuclear program. That has sparked some “speculative trading on Wall Street” that has added to the cost of oil, he said.

While most U.S. states lose from higher oil prices, six states including Republican strongholds Alaska, North Dakota, Wyoming, Mississippi and Alabama gain as local energy producers see higher revenues, Houser said. There is no “meaningful” oil production in Democratic states excluding California.

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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