From Think Progress, news of an Associated Press study:
U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon when adjusted for inflation. But that’s not what prices are now.
That’s because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.
When you put the inflation-adjusted price of gas on the same chart as U.S. oil production since 1976, the numbers sometimes go in the same direction, sometimes in opposite directions. If drilling for more oil meant lower prices, the lines on the chart would consistently go in opposite directions. A basic statistical measure of correlation found no link between the two, and outside statistical experts confirmed those calculations.
To which Think Progress concluded:
Domestic oil production is at its highest level in eight years. According to the AP, if drilling dictated gas prices, they should already be at the $2 Republicans promise. However, gas prices fluctuate based on a variety of factors, including speculation and tensions in the Middle East.
These facts haven’t stopped Republicans from rallying around “drill, baby, drill.” President Barack Obama quipped last week on the GOP’s drilling fever: “I guess there’s some empty spots where we’re not drilling. We’re not at the National Mall. We’re not drilling at your house.”
What we don’t need is a national policy to reduce our dependence on foreign oil. We need policies that reduce our dependence on oil itself. We need policies that encourage battery-based automobiles. We need power the electricity grid on something other than fossil fuels (coal pollutes even worse than gasoline, and it just as dangerous), We need laws that demand new homes and businesses have solar and wind power components. We need regulations that parking lots have dedicated parking spaces that allow battery-powered car owners to recharge. We need to get local municipal governments out of the business of saying yes or no to wind farms.
But that we’ll get is more tax breaks for BP and Exxon.
This blog is ECLECTIC. Mostly, I write about politics and media. Sometimes, I post a funny cartoon. Sometimes I post pictures of pretty girls. I am baffled as to why people who visit this blog regularly complain about this.
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Of course there is not a statistical correlation between supply and prices, because the study ignores the other important variable that determines gas prices: demand. To leave demand out of this conversation demonstrates a fundamental misunderstanding of what drives market price.
The comparison study needs to be performed on supply:demand ratio vs price. Ignoring demand will not give you relevant information (unless demand remains constant, which it has not).
First, well said Billy.
Second, domestic demand is low due to the slow economy, fall in U.S. manufacturing and a gradual return to greater fuel efficient vehicles. What is rising is global demand, principally from China and India. This is why so much domestic oil in currently exported in record numbers. The Keystone pipeline if completed, will actually raise domestic oil prices due to facilitating additional exports eliminating the need to currently refine it in North America.
Third, oil speculation has been attributing $0.50 per gallon or more.
U.S. consumers have almost no effect on fuel prices while oil companies have absolutely no loyalty to its North American consumers.
Everything the Republicans advocate for in an energy policy is the prolonged dependence on fossil fuels while consuming U.S. energy reserves with no backup plan.
The oil and natural gas companies need to pay the actual worth of access to these natural resources and have removed all tax breaks and gov. subsidies.
When the price of fossil fuels is realistically priced, renewable energy can compete on the free market. As for nuclear, it can never compete in the free market, so this country needs to decide how much its willing to subsidies the industry.
China is investing heavily in green/renewable science and technology. Ultimately, the U.S. either makes the commitment to develop it ourselves, or eventually purchase it from China after the domestic economy is forever destroyed due to high fossil fuel costs.
It ain’t rocket science, its about putting national interest before the power and greed of oligarchies and plutocracies.
Announcing a move toward greater supply can’t help but drive prices down.
I am not betting man but if I was my bet would be that the United States of America will be energy independent in 10 years.
Why yes, ThinkProgress is always correct and never has an agenda
You know better than this, Billy. Oil production has to increase faster than demand to reduce prices. That is hasn’t been doing thanks to Obama’s restrictions on off-shore drilling and drilling on federal lands. Also, refining capacity is a factor and EPA emissions regulations are forcing some refineries to close or cutback.
Huh. Interesting how it’s “Obama’s” restrictions on offshore drilling, when in fact (which Jordan hates), the first president to ban offshore drilling was George H.W. Bush in 1990, a ban that stayed in place through Clinton and through 7.5 years of Dubya before Dubya “called on congress” to end the ban in the summer of 2008, just months before he left office.
http://www.msnbc.msn.com/id/25674571/ns/business-oil_and_energy/t/bush-calls-congress-lift-oil-drilling-ban/#.T2zLmNnNkUo
But it’s “Obama’s restrictions”. Got it, Jordan. Whatever.
True, Bush 41 issued an executive order in 1990, but Congress already banned the practice in 1981. Yet, Bush’s order came at a time when oil prices were at $17 a barrel. Also, the order had no effect in international waters, like most of the Gulf of Mexico.