Travel-killing gas prices worry Obama, too

With gas prices above $4 in some states, Americans are canceling spring-break plans and
rethinking summer vacation. Some tourist destinations are offering gas vouchers of as much as $50
to talk people out of giving up and staying home.

At Mount Rushmore, only about 37,000 people decided in March that seeing the four giant
sculptures of U.S. presidents was worth the trip, down from about 43,000 a year before.

At the Grand Canyon, a marketing executive for one company that offers helicopter tours says 10
percent fewer people than last year are driving up and booking rides. The company is counting on
international tourists to make up the rest.

And along the Rhode Island coast, where 800,000 people a year show up to gawk at the opulence of
Gilded Age mansions, it’s even worse – business is off 30 percent since the beginning of March.

“I can’t go anywhere because I can’t afford it,” said Greg Sensing, who works in admissions at
the University of Maryland. “It’s kind of nice to take a road trip … now, why bother doing

The gas jitters have much broader implications than how many people show up to take pictures of
Bryce Canyon, Mount Rainier or the Everglades. Gas prices are closely tied to the health of the
overall economy.

Given that, the Obama administration announced yesterday that it will investigate the energy
markets for any evidence of manipulation of oil and gas prices, the Justice Department said.

With the average price of a gallon of gas at about $3.84 this week, the newly formed Oil and Gas
Price Fraud Working Group will search for fraud and collusion in addition to price

“The attorney general’s putting together a team whose job it will be to root out any cases of
fraud or manipulation in the oil markets that might affect gas prices – and that includes the role
of traders and speculators,” President Barack Obama said at a town-hall meeting in Nevada
yesterday. “We are going to make sure that no one is taking advantage of the American people for
their own short-term gain.”

Because no evidence has surfaced of actual fraud or price manipulation in oil markets, Obama’s
remarks appeared, at least in part, as more of an attempt to assuage public anger over rising
gasoline prices. Other presidents have launched similar inquiries at times of rising oil

In an Associated Press-Gfk poll last month, 51 percent of adults said they thought recent
increases in gas prices were caused by “oil companies that want to boost profits” rather than
changes in the global oil market.

Obama renewed his proposal to end roughly $4 billion annually in various government subsidies to
oil and gas companies “at a time when they’re making record profits and you’re paying near-record
prices at the pump. It has to stop.”

Energy experts said the likelihood that corruption in the oil and gas markets is a major factor
in rising gas prices is low, although the possibility exists.

“Forming the group is probably not a bad thing, but I don’t expect it to turn up more than would
have come up in any normal case,” said David Pumphrey, deputy director of the energy and national
security program at the Center for Strategic and International Studies in Washington. “I think the
run-up at the pump pretty clearly and closely tracks the run-up we’ve seen in crude-oil prices

The price of a gallon of gas is above $4 in six states: $4.52 in Hawaii, $4.21 in California,
$4.18 in Alaska, $4.11 in Connecticut, $4.08 in Illinois and $4.05 in New York.

It’s too early to tell how much of a toll gas prices will take on summer tourism. The jitters
have come so early that AAA hasn’t even put out its summer travel forecast yet.

But there are signs that the prices at the pump are changing Americans’ behavior. In Oklahoma,
where gas is $3.69 per gallon, AAA says it’s getting a lot more calls from people who are out of
gas on the highway. National demand for gasoline, which should be rising at this time of year, is
falling instead.

Some tourist destinations are worried that people won’t bother piling the family into the car at

Branson, Mo., the Ozark Mountains hotspot that draws people to tour caverns, frolic in amusement
parks and see live entertainment, is offering a discount card for $50 in gas starting in June.

The Preservation Society of Newport County, R.I., which runs several of the Rhode Island
mansions, is offering $5 back to anyone who buys two $24.50 tickets to two mansions and shows a car

Bill Pott, owner of Jellystone Park Camp Resort in Cave City, Ky., near Mammoth Cave National
Park, said he’s had a strong spring season so far, but he’s offering an informal discount to help
folks cover their travel costs: Stay three nights in a $70-a-night cabin, and he’ll discount your
bill $40 to pay for a tank of gas.

“Most people are driving three or four hours to get here, and I can’t do a thing about national
fuel prices or the economy, but I can help the kids have a good spring break,” he said.

All that still might not be enough, especially if, as analysts fear, the price of gas keeps

If gas were to go to $5 a gallon and stay there, some analysts think, it could erase the gains
the economy is making and tip the nation back into recession, because Americans would sharply
curtail spending elsewhere.

Information from McClatchy Newspapers was included in this story.

Apr 22nd, 2011 | Posted in Travel
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