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Today's Top News
'Drill Baby Drill' Will Never Curb Gas Prices: Report
Statistics directly contradict 'Drill Here, Drill Now, Pay Less' approach
An AP report released today states that increases in US domestic oil production have never decreased gas prices, nor will they ever. Rather, gas prices have often actually increased alongside domestic oil production.
The new report evidences that U.S. production and demand have little to do with the price of gasoline. Factors of global oil production and the global market effect US prices far more.
"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," AP reports, as sources suggest Obama is set to approve portions of the Keystone XL oil pipeline today.
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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. [...]
More oil production in the United States does not mean consistently lower prices at the pump.
Sometimes prices increase as American drilling ramps up. That's what has happened in the past three years. Since February 2009, U.S. oil production has increased 15 percent when seasonally adjusted. Prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more. [...]
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. [...]
"Drill, baby, drill has nothing to do with it," said Judith Dwarkin, chief energy economist at ITG investment research. Two other energy economists said the same thing and experts in the field have been making that observation for decades.
The statistics directly contradict the title of GOP presidential candidate Newt Gingrich's 2008 book "Drill Here, Drill Now, Pay Less," as well as the campaign-trail claims from the GOP presidential candidates.
Earlier this month, GOP front-runner Mitt Romney said of his solution to higher gas prices: "I can cut through the baloney ... and just tell him, 'Mr. President, open up drilling in the Gulf, open up drilling in ANWR (the Arctic National Wildlife Refuge). Open up drilling in continental shelf, drill in North Dakota, drill in Oklahoma and Texas.'" [...]
Supporters of the controversial Keystone XL pipeline say it would bring 25 million barrels of oil to the United States a month. That's the same increase in U.S. production that occurred between February and November last year. Monthly gas prices went up a dime a gallon in that time. [...]
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Keystone XL Pipeline: Obama to Oil Progress as Pump Prices Rise (The Guardian/UK):
Barack Obama is expected to speed up approval of the Keystone XL tar sands pipeline on Thursday after taking to the road with what the White House is billing as an "all of the above" energy tour. [...]
Obama has been under nonstop attack from Republicans for rising petrol prices, which now stand at well over $4 (£2.50) for a US gallon in some parts of the country, and for his decision in January to halt the pipeline because of a section running through an ecologically sensitive part of Nebraska.
On the campaign trail, Newt Gingrich has said he would cut gas prices to $2.50 if he is elected president, and Mitt Romney has taken to demanding Obama sack his energy secretary, Steven Chu, the interior secretary, Ken Salazar, and his Environmental Protection Agency administrator, Lisa Jackson. Gingrich calls the three the "gas hike trio".
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During his visit to Ohio State University this Thursday, climate actvists will push President Obama to stand up to the fossil fuel industry and stop “extreme energy” projects like the Keystone XL tar sands pipeline [...]
"I don't know the last time President Obama took a multiple choice exam, but when you have two contradictory options like protecting our climate and increasing our dependence on fossil fuels, 'all of the above' is not a correct answer," said Stuart McIntyre, a student at Ohio State University. "President Obama needs to choose one or the other, because our future as young people depends on it." [...]
“We're in the middle of the hottest spring week America has ever seen,” said 350.org founder Bill McKibben who has led protests against Keystone XL. “It makes it ironic almost to the point of parody that the president is still lauding pipelines and drilling rigs alongside solar panels and advanced batteries, as if all forms of energy were equally benign.”
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