Posted on 03/28/2012 2:38:26 PM PDT by 1010RD
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.
If more domestic oil drilling worked as politicians say, you'd now be paying about $2 a gallon for gasoline. Instead, you're paying the highest prices ever for March.
Political rhetoric about the blame over gas prices and the power to change them - whether Republican claims now or Democrats' charges four years ago - is not supported by cold, hard figures. And that's especially true about oil drilling in the U.S. More oil production in the United States does not mean consistently lower prices at the pump. [more at the site]
(Excerpt) Read more at minnesota.publicradio.org ...
Any comments?
Brought to you by”
“Minnesota Public Radio”
Fair and balanced, no doubt.
The laws of supply and demand do not obtain where King Obama is involved.
Wait. Stop. Hold it right there. If it's by the Associated Press and Minnesota Public Radio is broadcasting it, the needle on my suspicion meter just flopped all the way over to the right.
Considering the source, I'm going to wait for someone to look into the matter without Marxist rose-tinted glasses.
Supply and demand works every time it is tried.
http://www.easttexasoilmuseum.com/Pages/morehistory.html
Production of East Texas’ newest commodity increased rapidly from seven wells every other week, to seven wells daily, to more than 100 wells put into production each day. The first oil discovered sold for $1.10 a barrel, but prices plummeted to 15 cents as supply flooded the market and drilling activity spread to Upshur, Smith and Cherokee counties.
Production swelled to more than 1,000,000 barrels daily and in August 1931, National Guardsmen were ordered into the area to keep peace between roughnecks, lease hounds, oil speculators and camp followers. These actions finally culminated in legislative action – a market-demand law, confiscation law, truck-tender law, the refinery control and felony bill, and the Connolly Hot Oil Act of 1935, which restored order and stability.
comments from MPR.......liberal states mouthpiece. How about we drop carbon sequestration because our efforts to date have not made a dent. No effect on price? How about we express path refinery locations in the USA so we have greater refinery capacity and greater flexibility for our pipelines? Why not build more plants? Why not more nuclear in the US? Let the market drive down prices and give consumers the final say in how they want to spend their hard earned money for the products and processes they want to pay for. Minnesota......Ventura country.
And yet we are told we may have to wait up to 20 YRS... give or take...for wind and solar power to kick in.
How much oil had the drilling produced, that is the issue, not the amount of drilling done per se.
The devaluation of the dollar.
About 75% of the cost of gasoline is the cost of the oil necessary to produce it. Oil is traded in U.S. dollars. The Obama/Bernanke printing press has been working overtime not only printing money, but devaluing the dollar for quite awhile now. The cost of oil goes up as the value of the dollar goes down.
Same thing with all your groceries. The devalued dollar is a participant in that crime as well.
It’s about drilling here rather than importing. It means jobs...good jobs....and more income for the government who, if they were nice, could take off the Federal Tax at the pump. So could the states...We can lower prices here....if we stop importing.
By that same logic , no drilling in the US would leave the prices the same.
Of course china and India were not competing for oil for many of those 36 years, and having drilling here means the jobs, economy and taxes stay here.
comments from MPR.......liberal states mouthpiece. How about we drop carbon sequestration because our efforts to date have not made a dent. No effect on price? How about we express path refinery locations in the USA so we have greater refinery capacity and greater flexibility for our pipelines? Why not build more plants? Why not more nuclear in the US? Let the market drive down prices and give consumers the final say in how they want to spend their hard earned money for the products and processes they want to pay for. Minnesota......Ventura country.
Any comments?
Yes, virtually no drilling has occurred yet, compared to what needs to happen. The oil is there to be had.
There is a lag time, between the commencement of drilling, and the delivery of the first barrel of crude, or the first collection of natural gas. Then, there is the problem of transporting the product, whether by pipeline, that may have to still be built, or by surface transportation, railroad or tank trucks, needing tracks or raodways to the site.
Because the flow of oil did not start with the first turn of the drill rig, the Nellie Negatives point and say, it will be YEARS before this is up and producing.
Which is no argument at all, because we must start NOW to have the supply flowing three to five years out, and if we DON’T get started, where will we be in three to five years?
http://en.wikipedia.org/wiki/Connally_Hot_Oil_Act_of_1935
The Connally Hot Oil Act of 1935
Ostensibly enacted to protect the industry from “contraband oil”, it was mainly a way of cartelizing the industry to stabilize falling prices.
MPR is just regurtitating a liberal think-tank report that came out a week and a half ago.
When crude oil prices drop for an extended period, certain domestic wells become un-economical to operate and they are capped. And not much new drilling happens under those conditions.
It’s an Egg before the Chicken proposition and not the other way around.
If it were as simplistic as the author implies an 8th grade graduate or a Democrat could be an respected analyst who's opinions are taken seriously.
The law of supply and demand is not irrelevant. We are not living in an alternate universe.
The simple answer is, all other things being equal, more supply will cause prices to be lower and less supply will cause prices to be higher.
HERE WE HAVE IT: Christopher Knittel, a professor of energy economics at MIT says “American oil production is about 11 percent of the world’s output, so even if the U.S. were to increase its oil production by 50 percent - that is more than drilling in the Arctic, increased public-lands and offshore drilling, and the Canadian pipeline would provide - it would at most cut gas prices by 10 percent.”
ACCORDING TO THIS BRAINIAC’s logic the US could cut its production BY HALF and gas prices would only rise 10%. AND IF THE US just packed it in and stopped 100% of its production, then the price would only rise 20%. Gosh, it looks like Obama and Chu are right and we should start growing algae in our our swimming pools ASAP.
This is the biggest load of crapola I've seen since the Trayvon Martin non-story broke. What these folks conveniently ignore is that the enviroweenies have virtually prevented ALL refinery production since the 70s and they celebrate everytime an American refinery closes or has to shut down for repairs or upgrades. The more oil we can produce here and the more refineries we have to produce the gas, the lower the price. It's a simple economic formula that the left tries to obfuscate at every opportunity.
When we are all back to commuting by horse and buggy, the very same people who hate oil, gas and automobiles will be screaming the loudest about not being able to get oil, buy gas or drive their automobile!!
I'm REALLY beginning to hate leftists!!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.