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HOUSTON—How is buying gasoline like voting? The price of one usually predicts the outcome of the other, according to a leading Washington, D.C., policy strategist.
Daniel Clifton, partner and head of policy research for Strategas Research Partners, a brokerage firm that provides research, advisory, and capital market services to institutional investors and executive management, told the annual Energy IR conference of the National Investor Relations Institute to watch fuel prices closely in the next year.
“Gas prices nationwide average about $2 a gallon now,” Clifton said in his Nov. 19 presentation. “If they’re at $2.50 next summer, that will seem high to motorists and we could see another anti-incumbent election.”
He said a rise in fuel prices in the months preceding a presidential election has been a good indicator that there will be a change—whichever political party controls the White House.
Any uptick in pump prices will only add to voters’ current angst, Clifton added.
“We have had sustained, low economic growth and voters feel there is something wrong,” he said, adding the economic malaise of the past few years resembles the sluggish economy of the late 1940s and early 1950s. That period led to Republicans gaining control of Congress after World War II and the election of the first Republican President, Dwight Eisenhower, in 24 years in the 1952 election.
Clifton told the audience of energy firm investor relations professionals the likelihood of new energy legislation coming out of Congress, such as repeal of the crude oil export ban, before the November 2016 is unlikely. Also currently, the Syrian refugee issue has the attention of elected officials. However, he noted a compromise on crude exports might allow oil sales to nations participating in the proposed Trans-Pacific Partnership trade agreement that will go to the Senate for approval.
Rather, watch for efforts by regulatory agencies to impose significant regulatory changes on the oil and gas business, he said. President Obama’s regulatory leaders in multiple agencies with power over the energy industry are aware that the next administration, even if a Democrat wins, will not be as strongly focused on climate change and renewable energy.
Clifton said President Obama’s veto of the Keystone XL Pipeline “was a major change in energy policy. The President is solely focused on climate change and knew he could be viewed as a hypocrite” if he approved the project.
The strategist also discussed the 2016 presidential vote in his wide-ranging presentation. He reminded the conference that, based on past election cycles, there could be significant shifts very soon in which candidates hold the lead for the parties’ nominations. He noted Secretary of State John Kerry’s campaign for the 2004 Democratic nomination was suspended and broke in November 2003. Yet Kerry, after a cash infusion from his wealthy wife, turned things around and won the nomination the following summer. Likewise, Obama was well behind Hillary Clinton in polls taken in December 2007 but won the party’s 2008 nomination.
On the Republican side, former New York Mayor Rudy Giuliani was well ahead of the eventual nominee, Sen. John McCain, in late 2007. Based on those precedents, Clifton said to watch for major swings in poll numbers between now and the first of the year as the caucuses and primaries near.
“The campaigns have yet to spend a lot of money. And voters like to date candidates early but those candidates aren’t who they take home to meet the parents,” he added. “We think somebody is going to implode” and that could bring a major change to the current Republican candidate lineup. He predicted the GOP nomination will come down to Senators Marco Rubio and Ted Cruz.
When he asked in a question-and-answer session for his prediction for the November 2016 general election, Clifton replied, “I think it will be Rubio 51-to-49 over Hillary—but there is a wide margin of error in that prediction,” he added with a laugh.
Paul Hart can be reached at pdhart@hartenergy.com.
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