Why is gasoline high priced?
The same reason jewelry is high priced.
The stuff it is made out of (gold or crude oil) is very expensive these days.
Exporting it, or making a surplus locally isn’t going to change that base condition.
Some people seem to think if we stop exporting it, it would get cheaper. That is nuts. It is still a fungible commodity. We could shut down a few more refineries, loose a few more jobs if we banned the exports. That would be the only effect.
Anybody think that food, cars, computers etc are more expensive because we “allow” export?
You might get a temporary drop in price, like we see in Natural Gas today. But also look at how that Natural Gas drilling in “dry” fields is dropping fast. Many rigs that were drilling for gas have moved to oil in the last couple years. And most of the gas drilling is after “wet” fields that also produce significant Natural Gas liquids. In some areas, the gas is merely a by-product of the oil or condensates that are the primary drilling target.
But if we don’t allow Natural Gas exports, or find a way to quickly use more of it ourselves, we are going to see new drilling for dry gas nearly stop. Those shale wells loose production rates quickly due to the low porosity of formations. Our current cheap natural gas is going to change. Either the demand will go up or the supply is going down. The companies cannot afford to do differently.
The reason the drilling in places like North Dakota and Texas is booming IS the high price. Artificially force a position that lowers the price and that boom, the associated jobs for steel, cable, roads, housing, etc all end with it.
We need to grow more domestic production. We need to open more areas, encourage more drilling with reasonable regulations. That way we will continue to grow our resource and jobs base while gradually lowering price with a growing supply to the world market. Otherwise, we are just setting ourselves up for even greater punishment later.
WooF!..
Heard it put very simply on a local radio talk show that a drilling rig in west Texas is equal to a two million dollar construction project every two weeks. West Texas has over four hundred rigs running in the Permian Basin, each averaging a new well every two weeks. 26 new wells per year per rig is a lot of money, lots of damn good paying jobs, lots and lots of tax money, houses, new cars, clothing and medical care.
This country is the dumbest on the planet for not drilling everywhere there is a potential for a producing well. Just down right ignorant.
Thank you sir for your wise posts.
An island of knowledge in a sea of emotion.
Your post is proof of the utter failure of goverment schooling. Every adult American should know the basics without the details you’ve provided. Our innumeracy and ignorance of classical economics (reality) allows politicians to pretend to pull rabbits out of hats and get 51% of the voting public to believe it. You cannot have socialism with an educated public.