Wednesday, March 16, 2011

Just So We're Clear On The Gas Price Thing...

... and frankly because I'm getting sick and tired of Mississippi Governor Boss Hogg and his inane meme that President Obama is somehow manipulating high gas prices because of administration policies (it comes out whenever Barbour decides to open his cakehole), "Drill here, drill now" has nothing to do with gas current prices. That goes for House Speaker John Boehner and Sarah Palin too. Boehner's just using it as a political tool, while Palin should just shut her yapper for once and trying learning something. Drilling here, drilling now might yield oil production increases... in a decade or two, which has nothing to do with today's prices. And the experts, conservative or not, agree:

Near-term fluctuations in gasoline prices are determined by two primary factors: crude oil prices and seasonality. Since the deepwater drilling delay applies only to exploration and production, it would take years, maybe a decade to get any amount of crude oil out of the ground and into our gas tanks. In the meantime, global crude oil supply is exactly the same as it would have been if the government were giving away permits like candy.
~ Chris Lafakis, economist at Moody's Analytics and expert in energy markets

It's not credible to blame the Obama Administration's drilling policies for today's high prices because of the relative scales involved. As I indicated the last time, world oil prices are determined in a market of around 85 million barrels per day of production and consumption, while the consequences of domestic drilling, particularly in the Gulf, likely would be more in the range of several hundred thousand to one million barrels per day, and most of that production would not occur for a number of years.
~Michael Canes, research fellow at the Logistics Management Institute and former chief economist of the American Petroleum Institute

Higher oil prices today are a global phenomenon, and the additional supply from increased drilling by the U.S. would not alter the global balance of supply and demand greatly. Gasoline prices at the pump would be higher either way.
~Lou Crandall, chief economist of Wrightson ICAP LLC, an independent research firm that analyzes high-frequency economic data

Even if you gave permission to drill, it might take generally about seven years for oil to get to market. So that has absolutely no effect on the price of oil today. None whatsoever. The amount of extra oil that the U.S. would produce, as far as affecting the world price of oil, is almost insignificant.
People who say producing more oil will bring price down for Americans are missing the fact that it's a world market. For instance, oil produced in North Slope may very well go to Japan. There's not a separate market -- It's a world market.
~Tom O'Donnell, professor of Graduate International Affairs at The New School and expert on the globalized energy sector
Drilling here, drilling now will only serve to add more oil production to the global market at minimum in the year 2018. It may be harvested on our land, but that doesn't mean it's ours. It's put into a reserve where we are free to purchase it at global prices. And for this privilege, we continue to give exorbitant subsidies and tax breaks to Big Oil.

If Haley Barbour is serious about running for president, then he needs to stop sounding like a fool when it comes to energy policy and lying about the true causes of rising gas and oil prices.

And while we're at it, maybe the media should actually do the research, tell the truth and challenge anyone who tries to blurt out nonsense for purely political purposes instead of having two nitwit talking heads arguing both sides of an issue and giving both sides equal gravitas. Usually, someone is right and someone is wrong. Usually, someone is being honest, and someone isn't. So do your homework and call them out on it. Isn't that what you're supposed to do with liars when you have truth on your side?

1 comment:

willis said...

Yep, oil is a global commodity and is sold through a clearing house based on world demand. Any more oil from the US would just fall in with that produced globally and sold at the best price they can get for it and have no effect on the price we pay at the pump.