FACT CHECK: More US drilling didn't drop gas price


#1

businessweek.com/ap/2012-03/D9TL1BO00.htm

It’s the political cure-all for high gas prices: Drill here, drill now. But more U.S. drilling has not changed how deeply the gas pump drills into your wallet, math and history show.

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.


#2

Gee, and they just recently verbaly crucified Obama for saying that drilling won’t necessarily lower gas prices at the pump.

Jim


#3

Well, the government artificially limits supply, by not allowing drilling on public land. And this has been going on for decades. To lower prices, world supplies must increase with increasing world demand.

Jon


#4

That’s because oil is a global commodity and U.S. production has only a tiny influence on supply.

But enough of a US increase that would affect world supplies certainly would. We certainly have the reserves in shale.

What does our subsidies to failing solar companies and algae do to global commodity prices?


#5

If supply does not increase with demand, prices will not drop.

I’d like to see a “A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and” supply and demand. :rolleyes:


#6

What does our subsidies to oil companies which make record profits each year, while the price of gas puts the economy in peril?

Jim


#7

Only if the price is right. And then when the price falls, they close shop (again).

People want free gas and they don’t realize that if this were to magically happen, all gas stations would go out of business and they wouldn’t be able to get the free gas.


#8

[quote="qui_est_ce, post:5, topic:278027"]
If supply does not increase with demand, prices will not drop.

[/quote]

The Federal Reserve can create false demand of oil, by extending excessive credit to the speculators, which is almost guaranteed to drive up prices.

Volcker managed to cut oil prices back in the 80's by increasing interest rates across the board. This lasted until 2001 before Greenspan started dropping rates to super low levels. We have yet to go back to the more stable prices of the 80's and 90's.


#9

americanthinker.com/2011/05/about_those_oil_subsidies.html


#10

Damn their depletion deduction “subsidy”!!!

Great article.


#11

Exxon recently released its first quarter results for 2011. The number grabbing the headlines was Exxon’s profit: $10.65 billion in a single quarter. The number not given quite as much exposure was the taxes it paid in that same quarter: $8 billion, or 42% of income before taxes.

And what does Exxon do with all that money it has left after paying $8 B in taxes? It put $7.8 billion into capital and exploration, as part of its plans “to invest between $33 billion and $37 billion per year over the next five years to develop new energy supplies.”

In any other industry, that would be called “research and development.” Exxon is plowing 73% of its after-tax profits back into R&D. Who would be better at spending $4 billion of energy companies’ earnings in an attempt to provide our energy in the future: the energy companies or Obama’s energy czar?

Hmm, I choose the energy companies.

Jon


#12

I don’t think it helps that we have a president who thinks we should be paying as much as they do in Europe for gas either.


#13

The same study found that the law of supply and demand no longer exists.


#14

commentary


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