“Someone smarter than you and I could make economic predictions about the price of gasoline based on what is known today. I can’t, and I don’t assume that if we just get more domestic oil production we will necessarily get a lower price in gasoline. I think getting more domestic production is worth doing regardless of the price of gasoline; if only to reduce imports and be more secure with regard to our energy sources.”
I agree with the general sense of your analysis but you are not clear about the volatility in oil and gasoline prices. Oil prices have been volatile for decades with periods of increased demand pushing up the price and then falling demand and increased supply pushing the price back down. The market is relatively tight so rather small changes in demand and supply can have non linear impact on prices.
Many individuals argue that increased domestic exploration will not impact prices or not impact prices much. If all producers behaved in this manner, world production would be stuck at 1980 levels. With 1980s level production, the worldwide economic activity would be sharply lower. Increased production has allowed increased demand, vital to increased economic activity. Thankfully, every country except the US allows its domestic oil industry to explore and produce more.
Don’t get me wrong. I understand the cyclical ups and downs of oil prices, oil supply and oil demand over the last fifty years.
I also understand it is a world market, with respect to supply and demand. Therefor, I simply don’t presume to predict that increased U.S. domestic supply will not also be matched with much increased world demand when that supply comes online, and thus I have no assurance that that supply will depress, or lower a rise, in gasoline prices or not.
And, frankly I am not so concerned about that, the marketplace will take care of it. I am simply VERY MUCH in favor of more domestic exploration and production, for the sake of our domestic energy companies and resources as sufficiently good things in their own right.