Statistics can tell you anything you want
(WRAL) 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.
You’re welcome to read the whole thing, but, it comes down to the AP wanting to defend Obama, pure and simple. What’s missing is that supply has to outstrip demand to bring prices down. It hasn’t. Even with more domestic drilling on private land, as we’ve seen, the demand still outweighs supply. Said statistics are mostly based on world supply and demand, which fluctuates. Were America to make a concerted effort to massively increase our own supply, our domestic prices would change, much like in the other big producer countries, where prices are much lower.
The AP also forgets to get around to telling us what, exactly, drives prices.
When oil companies know that hey have somewhat unfettered access to all the domestic oil they want or need, when OPEC realizes that the US is not going to be their patsy any more, the price of gas will drop. Even the not yet extracted oil will change the mental state of the people who do this for a living- Big Oil. It changes everything, once they know they can drill, refine and market the oil right here. Until then, they have to wonder if they will be allowed to get the oil here with great restriction, or buy it on the markets.
Excellent points.
Actually in the communistic government in which we now live, the AP might have a point. If we increase supply, Obama will find so way to limit distribution. Also, much of the price per gallon is taxes. So the states and feds will just bump up the taxes to raise the overall price.
You need to think like a progressive. Logical thinking now days is dangerous.
It’s like these people don’t know the most basic of basic economics. They should be embarrassed. I can’t understand why they aren’t.
Lib Think gives me a migraine. But, you’re probably right, David. Actually, the Left has been doing this since the 70’s, since we no longer can build new refineries, which slows down distribution.
They work off of Soviet economics, Kevin.
There is another side to the “supply side” of the equation – refinery capacity.
The US has lost 35% of its refinery capacity due to 1) not building new refineries because of regulations and 2) closing refineries due to regulations.
Closing refineries in the Northeast means fuel to the northeast has to travel farther, adding to costs.
Drilling won’t lower costs unless we increase production capacity. With the government holding both raw supply and production at bay, there is little hope for lower prices.
Git is correct. Regulation among other things has destroyed the business, stopping the building of necessary new refineries because they are consumed with making alterations to the exisitng ones. It is a very costly proposition that no one on the left gives a shit about. My husband worked for 33 years at a Phila refinery, was a part of those changes. And Sunoco is the largest independent refiner in the country. They stopped drilling a long time ago, and purchase their oil from Africa, Mexico and Canada. One in this locale is already closed, another brand has closed nearby, and the big one that hubby worked at is negotiating a sale, but if not soon will close by July. The prices around here are expected to go sky high after that. And that doesn;t even begin to deal with the economic impact of closing three refineries in the Philadelphia area! So smart these liberal minds.