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High gas prices and foreign oil heating up 2012 campaign debate

Oil is causing political headaches for an unlikely duo:  President Obama and North Dakota Gov. Jack Dalrymple, a Republican.

In the past month, the price of gas has shot up about 30 cents a gallon and some Americans are paying more than $4 a gallon.

Oil, the lifeblood of American commerce, is causing political headaches for an unlikely duo: Democratic President Obama and North Dakota Gov. Jack Dalrymple, a Republican.

As the current occupant of the White House, Obama is being blamed by some angry consumers for high gas prices. In the past month, the price of gas has shot up about 30 cents a gallon and some Americans are paying more than $4 a gallon.

In western North Dakota, exhausted and frustrated residents want Dalrymple and his administration to quickly build an infrastructure to help them cope with the massive influx of people who are working in the oil fields.

Obama is being criticized because the United States remains dependent on foreign oil, and some industry leaders believe he should support more widespread drilling.

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In North Dakota, drilling from 6,664 wells produced 152 million barrels of oil in 2011 — a level that is overwhelming for some residents. They see heavy traffic, housing shortages and lines of people at every store and restaurant. Oil workers are living in man camps. Staffers at hospitals, schools and law enforcement agencies are rushing to keep pace with expanding demands.

It is a peculiar juxtaposition to see Obama and Dalrymple in the news at the same time.

Despite the huge output of oil by North Dakota — which has quickly become one of the nation’s top-producing states — the United States remains vulnerable to tremendous price volatility in gas prices. What Americans pay at their gas pumps is linked to world market demand for oil. China and India have been increasing their demand for oil, and that action has a ripple effect on prices around the globe.

Politics in the Middle East also have created a rollercoaster scenario for gas prices in the United States. Recently, concerns over Iran’s nuclear program have pushed the price of crude oil higher, because there are worries that Iran’s oil production may be reduced or disrupted.

“We cannot simply drill our way to lower gas prices,” Obama said in his Saturday radio address. “We must have a long-term strategy that uses every available source of energy — including oil, gas, wind, solar, nuclear, biofuels, and more.” The president also talked about “the important role that increasing the efficiency of our cars and trucks” can play, which he said would reduce dependence on oil and save consumers money.

Gingrich factor

Former House Speaker Newt Gingrich wants to score points with GOP voters through his pledge to bring gas prices down to $2.50 a gallon. Gingrich hopes to rejuvenate his presidential campaign by hammering the president on his energy policy. Gingrich is using public anger over high gas prices as a strategy to woo supporters taking part in the Super Tuesday primaries and caucuses on March 6.

While high gas prices can be an emotional issue in the upcoming presidential election, they also could stunt the economic recovery. Gas prices are eating into consumers’ discretionary spending and pushing up the cost of doing business, which then prompts companies to raise their prices on goods and services.

In western North Dakota, the oil industry has overtaken the landscape, daily life and economy. The Republican-controlled Legislature has allocated $1.2 billion over a two-year period to address housing, infrastructure and safety needs in North Dakota’s oil country.

North Dakota officials recently listened to hundreds of people at 14 public meetings to identify what kinds of help are needed to address some of the unmet needs.

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Dalrymple announced last week that he would name a state energy impact coordinator to help local officials tackle their problems. The governor also stressed that $806 million of the $1.2 billion still remains to be allocated for oil-related projects. That money will be used to construct truck bypass routes to move oil industry traffic out of city centers. It also will be used to address growing student enrollments, water supply systems, emergency services and a host of other issues.

Dalrymple is dealing with the immediate effects of the rapid increase in oil production in North Dakota. President Obama and the GOP presidential contenders should keep talking about the nation’s energy challenges and how they would address them.

One topic that is sure to get more debate is the proposed Keystone XL pipeline, which would carry oil from Canada to Texas. Environmentalists have strongly opposed the project and the Obama administration rejected the pipeline’s permit application in January.

Obama said that he was not making a judgment on the merits of the pipeline project, but that his administration couldn’t do a full assessment because of a “rushed and arbitrary deadline insisted on by Congressional Republicans.”

Keystone disagreement

Heidi Heitkamp, who is the presumptive Democratic nominee for an open U.S. Senate seat in North Dakota, disagrees with Obama on Keystone.

Heitkamp, a former North Dakota attorney general, sent Obama a letter in January in which she urged him to reverse his position.

“The Keystone pipeline would mean billions of dollars invested in our economy when we need it most, and tens of thousands of well-paid construction jobs at a time when too many Americans are out of work,” Heitkamp wrote in her letter to Obama. “Keystone would help lower prices at the gas pump for consumers and small businesses, and help us reduce our reliance on oil imports from the Middle East. It would allow our Canadian allies to ship their oil to the United States instead of China.”

The president hasn’t endorsed Heitkamp’s position on Keystone. But the Obama administration on Monday backed construction of a segment of the pipeline that would run from Oklahoma to Texas. TransCanada Corp., which is unhappy that the U.S. State Department delayed a regulatory decision on the full pipeline, wants to move ahead with a southern portion of the line.

Yet the sticky issue of a cross-border permit still exists, because TransCanada also has renewed its desire to ultimately build the full Canada-to-Texas line.

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Heitkamp is running for the seat of retiring U.S. Sen. Kent Conrad, a Democrat. North Dakota historically supports Republican presidential candidates and Sen. John McCain carried the state with 53.3 percent of the vote in 2008.

But Heitkamp is expected to wage a close battle with Republican Rick Berg, a member of the U.S. House. If President Obama and Senate Majority Leader Harry Reid want to keep the Senate in Democratic hands, they most likely will need Heitkamp to win in North Dakota.