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Brent oil spot price and world oil supply
 (broadly defined), based on EIA data. (The Oil Drum)
Seth Borenstein and Jack Gillum confirm that increased domestic oil production at the levels the United States can manage does not lower the price of gasoline. Their study of the inflation-adjusted price of gallon of unleaded gasoline going back to 1976 when data on that type of fuel started being kept show no statistical correlation between how much domestic oil is being pumped out of the ground and the price of gasoline being pumped into everybody's car.

It took former Maryland Lt. Gov. Michael Steele to turn "drill, baby, drill" into a GOP mantra. But the spirit of that call has been with us for a long time. In essence, open up every acre of the nation's public land to the driller's bit and not only will the United States be energy independent, but also the price of filling up your Hummer tank will plummet. It's a BS claim whoever makes it. Political rhetoric on the subject just doesn't match what's actually going on. What a surprise.

(Continue reading below the fold)

Republican candidates for the presidency have been harping on this nonsense again in the latest election cycle, with Newt Gingrich taking the lead role after Michele Bachmann bailed. This view of gasoline prices is one of two things: distortion of reality for political gain; or stupidity about how the global oil market works presented by the party that prides itself on understanding economics when nobody else supposedly does. Venality or stupidity. Take your pick.

The price of oil internationally is what has the greatest impact on the price of gasoline. It's true that the international price is distorted by geopolitical tensions in oil-rich regions, commodity speculators and large national monopoly producers stepping up or lowering what they pump out of the ground at any one time. Oil-rich countries may subsidize gasoline prices at home to keep them from being affected by the global market. But the key pricing factor is that when the world economy grows, demand for oil grows.

Given limited supplies, that growing demand drives the global price up. China and India have had a strong effect in that drive lately. U.S. domestic oil production's contribution is only a small proportion of that world market. Even doubling that production would barely budge the international price.

What Borenstein and Gillum found was that sometimes gasoline prices rise when domestic drilling increases. In fact, that is exactly what has happened in the past three years. Domestic oil production is up 15 percent since February 2009, back to where it was in March 2003, but prices in that three-year period have risen from $2.07 per gallon to $3.58. "It was," they write, "a case of drilling more and paying much more."

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.

The late 1980s and 1990s show exactly how domestic drilling is not related to gas prices.

Seasonally adjusted U.S. oil production dropped steadily from February 1986 until three years ago. But starting in March 1986, inflation-adjusted gas prices fell below the $2-a-gallon mark and stayed there for most of the rest of the 1980s and 1990s. Production between 1986 and 1999 dropped by nearly one-third. If the drill-now theory were correct, prices should have soared. Instead they went down by nearly a dollar.

With American oil production running about 11 percent of worldwide output, says Christopher Knittel, a professor of energy economics at MIT, the U.S. could expand its oil production by 50 percent and, at best lower gasoline prices by 10 percent. But it couldn't increase production that much even with all that drilling Republican politicians and oil companies want to see in the Arctic, in other currently protected on-shore and off-shore public lands and that the Keystone XL pipeline would deliver.
"There are not many markets where the United States can't impose its will on market outcomes," Knittel said. "This is one we can't, and it's hard for the average American to understand that and it's easy for politicians to feed off that."
Drill, baby, drill certainly helps boost oil company profits at the overall expense of the environment and the risk of catastrophes like the BP blowout. But it won't do anything to get us where we need to be going: ending the extraction and burning of fossil fuels. And it won't even accomplish the electorally advantageous goal of lowering gasoline prices.

Originally posted to Meteor Blades on Wed Mar 21, 2012 at 10:46 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  And THIS won't lower gas prices... (22+ / 0-)

    ...any time soon, either: "Obama Pushing for Keystone XL approval."

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Wed Mar 21, 2012 at 10:53:19 AM PDT

    •  You know, you (MB) really DO have the very best... (13+ / 0-)

      ...sig line in this entire community. I'm reminded of it on almost a daily basis; and, that's simply a byproduct of keeping up with current events.

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Wed Mar 21, 2012 at 11:03:56 AM PDT

      [ Parent ]

      •  So is this the Keystone Approval (1+ / 0-)
        Recommended by:
        Tamifah

        Obama caving?
        Or not?
        I can't seem to get a straight answer.

        You are not an Environmentalist if you support the brutal, cruel, inhuman life and slaughter of animals in Factory Farms which produce 18 percent of greenhouse gas emissions worldwide.

        by Christin on Wed Mar 21, 2012 at 06:37:57 PM PDT

        [ Parent ]

        •  Added - (3+ / 0-)
          Recommended by:
          NoMoreLies, Bailey2001, conniptionfit

          I did read MB's diary on this just now -

          Lakota arrested for blocking tar sands trucks

          and came across this quote - so I should give up all fantasies that Obama was going to to do the right thing here?   the media made it seem like keystone was stopped.  Obama made me believe in the same thing.
            confused.

          Why would TransCanada pay to build the southern pipeline without the expectation that the northern leg will be approved? It would be throwing money away, not something oil companies are in the habit of doing.

          I wouldn't say the Administration is being boxed in, exactly. To me it smells more like another case of trying to make everyone happy. In six months, they'll announce a "compromise" route and the cross-border section will be approved.

          Reforms come from below. No man with four aces howls for a new deal.
          Keystone XL will raise gas prices!

          by Turbonerd on Wed Mar 07, 2012 at 08:50:47 PM EST

          [ Parent ]

          You are not an Environmentalist if you support the brutal, cruel, inhuman life and slaughter of animals in Factory Farms which produce 18 percent of greenhouse gas emissions worldwide.

          by Christin on Wed Mar 21, 2012 at 06:46:03 PM PDT

          [ Parent ]

          •  The answer is that it is hard to tell (3+ / 0-)
            Recommended by:
            CA Nana, indie17, Christin

            As MB pointed out transcanadas plans sure include both segments so this may signal an approval of the northern section coming

            On the other hand a lot of oil moves between Cushing and the Txas refineries so an expanded pipeline. Etween the two might be profitable as a stand alone project also.  Is it a cave?  Not yet I think but it sure rattles the nerves. Others have thoughts?

            •  thanks... (0+ / 0-)

              As someone who trusted him since 2007 - on this issue, and after what I read here? My nerves are completely rattled.  And I think he's going to do it. And that breaks my heart. But at least I I know before I give him any more money. At least I know before I commit to his campaign, which i won't.

              You are not an Environmentalist if you support the brutal, cruel, inhuman life and slaughter of animals in Factory Farms which produce 18 percent of greenhouse gas emissions worldwide.

              by Christin on Thu Mar 22, 2012 at 04:31:31 AM PDT

              [ Parent ]

              •  Well I wouldn't through the baby out yet (1+ / 0-)
                Recommended by:
                Christin

                I am an environmentalist first and foremost, so I have been repeatedly disappointed with Obama, but I think too that i have made my peace with the fact that his administration is not a particularly aggressive one in that regard.  That said he has made some very significant strides in some fairly decent ways.  I would point to the support for renewables and some of the cafe moves (if they stick) as big things.  While he hasn't been particularly protective he has at least not worked to kill actions taken by the states and local governments the way a Republican president would.   Here in California where we are moving ahead with cutting carbon emissions aggressively having a mildly sipportive white house is a big help.  

                You are right to be frustrated and pissed, but I am not sure what to do with that. I don't think that having a republican presidetm is something we can afford to do since we need a reality based president who is capable of being pushed out of his comPlacency.  With Romney we wil lose eight years of going backward.   Then the planet will be truly fucked

                •  thank you Mindful..... (0+ / 0-)

                  for writing all that. i'm so so so upset. last night.
                  today i'm even worse.
                  when I say i was a "bot" that is a understatement.
                  i just can't take it anymore.
                  it one thing after another.
                  an on the environment, i don't see how he's different thatn romney.

                  i will NEVER ever ever vote for Romney.
                  Ever. ever. ever.

                  But I can no longer spend 80 percent of my weekends in the Summer and Fall canvassing, calling and sending money.  I can't. I would turn voters off.

                  But your post was something I needed to see.

                  You are not an Environmentalist if you support the brutal, cruel, inhuman life and slaughter of animals in Factory Farms which produce 18 percent of greenhouse gas emissions worldwide.

                  by Christin on Thu Mar 22, 2012 at 03:33:29 PM PDT

                  [ Parent ]

        •  caving? Yes, I would think so (1+ / 0-)
          Recommended by:
          conniptionfit

          Maybe I am wrong, but I would think that it is politically smart and in line with an "all of the above" approach to energy. I am afraid that the Keystone approval cannot be avoided. You can modify the route, make adjustments and wait for political changes in Canada as well. This is not sustainable long-term. But at the moment the pipeline would just go elsewhere - it cannot be avoided. Anyway, politically it is the only argument that the GOP really has and they push it again and again, attach it again and again to bills that really need to move forward to improve the economy. We are paying to high a price for this.

    •  According to the Globe and Mail (17+ / 0-)
      Prime Minister Stephen Harper has made it a key priority of his government to diversify oil and natural gas exports beyond the traditional U.S. market to target growing Asian markets.
      http://www.theglobeandmail.com/...

      In other words, the Keystone pipeline is about selling oil to China, India, and wherever else.

      "We'll explain the appeal of curling to you if you explain the appeal of the National Rifle Association to us." - Andy Barrie

      by HugoDog on Wed Mar 21, 2012 at 11:27:39 AM PDT

      [ Parent ]

    •  The Keystone pipeline goes to the ocean (14+ / 0-)

      You would think that even the right-wingers could figure out that they intend to export the oil.

      •  goes to the ocean, where a super tanker (9+ / 0-)

        loading facility has been proposed........

        And where over the last 8 years a million barrels a day of cat cracker capacity has been built up to pre refine heavey oil

        Gomer Pyle voice:

        Golly....

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Mar 21, 2012 at 01:37:41 PM PDT

        [ Parent ]

        •  you're too suspicious. also (2+ / 0-)
          Recommended by:
          Gooserock, Nada Lemming

          the keystone pipeline will net some jobs. in red states. only.

          (The above was probably snark, for the snark challenged) (The below was actually said by George W Bush in a press conference) I'm kind of stalling for time here...They told me what to say. George W Bush, 03-21-2006 10:00 EST Press Conference

          by Tamifah on Wed Mar 21, 2012 at 06:46:10 PM PDT

          [ Parent ]

          •  The East Coast refineries have been closed (3+ / 0-)
            Recommended by:
            conniptionfit, Tamifah, JVolvo

            because it is cheaper to send Canadian and North Dakota crude to India to refine. India does not the environmental constraints that the US has and is a region of growing demand.
            Petroleum industry analysts told a house subcommittee earlier this week that despite high US supply and decreased demand due to higher CAFE standards, hybrid and electric cars and the recession, prices will remain high. The law of supply and demand does not apply here.  
            The Keystone XL pipeline will happen. Oil industry profits depend on it.  You better believe it.

            Get your facts first, and then you can distort them as much as you please -- Mark Twain

            by OnePingOnly on Wed Mar 21, 2012 at 07:24:17 PM PDT

            [ Parent ]

            •  no it is the economic law of (0+ / 0-)

              "we can choke another dime out of you, you just THINK we're breaking your back but you can give a little more"

              (The above was probably snark, for the snark challenged) (The below was actually said by George W Bush in a press conference) I'm kind of stalling for time here...They told me what to say. George W Bush, 03-21-2006 10:00 EST Press Conference

              by Tamifah on Wed Mar 21, 2012 at 08:48:01 PM PDT

              [ Parent ]

          •  Texas crude is API 38+ Cat crackers not needed (0+ / 0-)

            dedicated cat crackers for heavy are not needed for WTI crude.

            A completed Keystone XL will feed 900kbd into a cracker capacity of 1mbd, and the super tanker facility has already been proposed for Houston.

            measly fact I know... :~ )

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Thu Mar 22, 2012 at 12:30:11 PM PDT

            [ Parent ]

    •  Keystone along with Drill, Baby, Drill (7+ / 0-)

      don't help prices.  They do enrich the fossil fuel companies who fund the campaigns to put officials in office who will do their bidding.  The American Circle of Life Corruption.

      There already is class warfare in America. Unfortunately, the rich are winning.

      by Puddytat on Wed Mar 21, 2012 at 03:14:50 PM PDT

      [ Parent ]

    •  all they are gonna do is sell it to other (5+ / 0-)

      countries

      (The above was probably snark, for the snark challenged) (The below was actually said by George W Bush in a press conference) I'm kind of stalling for time here...They told me what to say. George W Bush, 03-21-2006 10:00 EST Press Conference

      by Tamifah on Wed Mar 21, 2012 at 06:37:58 PM PDT

      [ Parent ]

  •  Dick Cheney, Koch Brothers, Oil Ceo's (14+ / 0-)

    They are the ones manulipulating the prices.  They have done it at every election to help GOP Candidates.  Nothing new here.

    •  Now Aided By More Wall Street With the Same (3+ / 0-)
      Recommended by:
      NoMoreLies, CA Nana, ZedMont

      intentions.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Wed Mar 21, 2012 at 06:51:53 PM PDT

      [ Parent ]

    •  don't be so simple (2+ / 0-)
      Recommended by:
      CA Nana, mightymouse

      oil price rising partly because of uncertainties in the middle east and partly because central banks around the world is printing way too much money out of thin air where the supply of money has become the demand.  and china which doesn't want to hold our devaluing dollars is smartly turning our paper money into tangible assets like oil, food, minerals and gold.  i mean, wouldn't you if you were in their shoe?  what would you rather be holding, our dollars that are being debased or oil and food?  it's a global market now.  the u.s. cannot contain this alone much less individuals or CEOs or what have you.

      Congrats. You've been divided and conquered. We're all serfs now.

      by Smoke and Mirrors on Wed Mar 21, 2012 at 07:07:22 PM PDT

      [ Parent ]

  •  supahcool (5+ / 0-)

    another republican meme dead.

    Never forget that the Republican War on Women originated with religion; the GOP is but theocracy's handmaiden.

    by Cedwyn on Wed Mar 21, 2012 at 10:59:11 AM PDT

  •  Fungible -- if all Americans would (11+ / 0-)

    learn that word:

    Able to be substituted for something of equal value or utility; interchangeable, exchangeable, replaceable.
    and learn that oil is fungible, all this "drill baby drill" nonsense would stop.  Somehow too many Americans hold this notion that oil pumped from domestic wells would be sold in the US market for less than oil pumped from foreign wells.  Or that the tiny US oil reserves could possibly impact the international price of oil if only production were increased.  
  •  it's what about 50% of the cost of gas (3+ / 0-)
    Recommended by:
    HugoDog, texasmom, Tamifah

    it's part of the problem but not the only one.

    more oil doesn't mean less gas prices.  there are other factors.

    -You want to change the system, run for office.

    by Deep Texan on Wed Mar 21, 2012 at 11:29:38 AM PDT

  •  I keep explaining it like this: (8+ / 0-)

    Pretend we don't have a problem with supply. Even still,  China and India combined have 8 times the population the US does....and many of them want the same lifestyle.

    Those two nations are moving fast in that direction. So to meet those energy needs AND keep our pricing here the SAME we need to increase production by 800%.

    BUT!

    Between now and 2050 the US population will reach 9 billion people, adding another 28% MORE demand.

    So in the space of 38 years if we want to keep our prices the same we need to INCREASE production by 1024% between now and 2050.

  •  Analysis not including world trade impact. (2+ / 0-)
    Recommended by:
    Tamifah, JVolvo

    just looking at the pure economics.

    A 50% increase in US oil production would cut the US balance of payment deficit in half, which would increase the value of the dollar and decrease the dollar price of imported oil further than described in the diary, probably on the order of an additional 10%.

    Increasing the GDP and employment contribution of the domestic oil industry by 50% would increase GDP by several percentage points, significant contribute to federal, state and local taxes and have about 500,000 direct above average pay jobs.

    Better yet, we could cover the remaining import of oil with other North American countries as sources.  This would make it much easier for the US military commitments in the middle east and Africa to be cut back sharply, significantly reducing spending on the military and dropping the need to go to war.  Ultimately, the way to make major cuts in military spending is to make major cuts in military "commitments." The reduction in military spending and war more than offsets the US environmental damage from higher production.

    To address the environment, increasing taxes on oil products with a revenue neutral per person tax credit is the way to go.  So the lower oil cost does not result in higher demand for oil products, but the average person still gets the benefit of the lower cost of oil to the economy.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Mar 21, 2012 at 11:49:21 AM PDT

  •  Government actions that would lower gas prices (4+ / 0-)
    Recommended by:
    Tamifah, Deep Harm, Nada Lemming, JVolvo

    1) Make it illegal to export refined fuel.

    2) Enforce the law that says that 80% of futures trades have to be done by producers and consumers of oil not by speculators like Goldman Sachs.

    I heard the second one on Thom Hartmann's radio show. He said that one by one, the big banks asked to be exempt from the rule. If that is the case, it seems like President Obama could revoke the exemptions by executive order. Can anyone confirm the existence of this law?

    Making fuel exports illegal would require an act of Congress and our current congress doesn't believe in "action." I think that banning the export of certain commodities is pretty standard in other countries.

  •  "Venality or stupidity. Take your pick." Isn't it (2+ / 0-)
    Recommended by:
    Tamifah, ZedMont

    both?

    The venal GOP leaders and officials know that they're lying to their base, and the stupid base laps it up. It sounds intuitively true and they want to believe it, so they stick their fingers in their ears whenever someone tries to explain how the oil market actually works.

  •  Well ... (5+ / 0-)
    Recommended by:
    George, Tamifah, NoMoreLies, JVolvo, ZedMont

    actually, I have to disagree ... slightly.  

    Analysis that I've seen is that the more rapid exploitation can impact prices -- a little bit -- in the near term even while depleting resources such that prices (imports) would be higher in the longer term.

    Covered in the piece you quoted the other day (The Republican Agenda To Raise America’s Gas Prices) and Drill, lower gas prices, build SUVs: lies to an ugly future has a discussion of how greatly expanded offshore drilling could, according to USG analysis by the W Bush Administration, reduce gasoline prices 20 years out by about 1 cent per gallon.

    Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

    by A Siegel on Wed Mar 21, 2012 at 01:03:47 PM PDT

  •  Add the third line to the graph. (2+ / 0-)
    Recommended by:
    Tamifah, Gooserock

    Demand.

    If supply stays steady and demand goes up, so do prices.

    If demand and supply are constant, but prices rise, then there is market manipulation.

  •  This cannot be repeated enough (5+ / 0-)
    Recommended by:
    Tamifah, wu ming, NoMoreLies, JVolvo, ZedMont

    The U.S. does not have enough oil to change the price of gas, even if we were reckless enough to actually extract every last drop from every last mote within the Earth.  Full stop.

    And even if we did, as long as oil is traded as a commodity, there's good money to be made in driving the price up higher than it actually ought to be.

    Besides, we'll be out of it soon, and it's lofting too much carbon into the air.  Better to phase it out now, before the supply is too low to make a gradual change even possible.

    All your vote are belong to us.

    by Harkov311 on Wed Mar 21, 2012 at 06:37:14 PM PDT

    •  we got lots of wind and sunlight tho (nt) (0+ / 0-)

      (The above was probably snark, for the snark challenged) (The below was actually said by George W Bush in a press conference) I'm kind of stalling for time here...They told me what to say. George W Bush, 03-21-2006 10:00 EST Press Conference

      by Tamifah on Wed Mar 21, 2012 at 06:43:57 PM PDT

      [ Parent ]

  •  Every one of us should appreciate that (2+ / 0-)
    Recommended by:
    Tamifah, ZedMont

    Asshat Michael Steele.  He's the guy who f'd up the GOP primary system, that is making such a clusterfuck of the GOP state caucuses and primaries.

  •  gouge baby gouge (5+ / 0-)
    Recommended by:
    Tamifah, Deep Harm, NoMoreLies, howd, ZedMont

    #occupywallstreet: Although I know the rhythm you'd prefer me dancing to, I'll turn my revolt into style.

    by xxdr zombiexx on Wed Mar 21, 2012 at 06:39:36 PM PDT

  •  YES -- Commodities are fungible!!!!1! (2+ / 0-)
    Recommended by:
    Tamifah, Deep Harm

    How many carbon atoms in a molecule of "foreign oil?"  

    No matter how cynical you become, it's impossible to keep up; no matter how cynical you are, you have no idea...

    by ChristopherMays on Wed Mar 21, 2012 at 06:40:16 PM PDT

  •  Not only that (1+ / 0-)
    Recommended by:
    NoMoreLies

    but US oil producers are not forced to sell their oil domestically; therefore, much of what they produce is sold to other countries.  In fact, the US is about to become a net exporter of oil.

    http://online.wsj.com/...

    Which means, any environmental damage that results from oil exploration will primarily be for the benefit of other countries and, of course, the pockets of oil company executives and investors.

  •  drilling is a function of price (6+ / 0-)

    more than vice versa.

    The "drill baby drill" crowd has it exactly backwards.

    we are doing all of this drilling BECAUSE oil is expensive. It now makes economic sense to drill in North Dakota's Bakken Shale, in Canada's tar sands, deep in the Gulf of Mexico.

    If oil were cheap none of this would be happening - because they couldn't make money on it.

    thanks for a good article on oil.

    there is a lot of bad journalism out there about this subject.

    An ambulance can only go so fast - Neil Young

    by mightymouse on Wed Mar 21, 2012 at 06:50:54 PM PDT

    •  I read your link "bad journalism" and bookmarked (1+ / 0-)
      Recommended by:
      mightymouse

      it.  As far as I'm concerned, this cite contains the most important words in these comments and is a MUST READ for anyone who seriously wants to understand why there is so much damn confusion, even here, among some of the smartest people in the country.

      No wonder the GOP can sell its snake oil (pun intended) so easily.  It would be one thing to sell it to a low-information- sound-bite-magnet public, but this article shows how the average educated person doesn't get it.  They just think they do.

      After reading this, I'm loathe to cite any "expert" and am virtually loathe to comment - virtually meaning there ain't no way in hell I'm gonna shut my error-ridden trap, all good intentions to the contrary.  lol

      What'd the devil give you for your soul, Tommy? He taught me to play this here guitar REAL good. Oh son, for that you traded your everlastin' soul? Well, I wuddn' usin' it.

      by ZedMont on Thu Mar 22, 2012 at 07:17:36 AM PDT

      [ Parent ]

      •  hey Zed, glad you found it as interesting as I did (1+ / 0-)
        Recommended by:
        ZedMont

        There is good info out there - but most news articles are messed up in one way or another. And it seems like it's getting worse ....

        Best thing is to get familiar with the eia.gov page and the various data available - import/export, production, etc. Go "sources and uses" -> "petroleum and other liquids" -> "data."

        Second best thing it to read "drumbeat" on theoildrum.com - esp the comments - a lot of knowledgeable people there. It is a little doomer-ish but not too much.

        drumbeat is the daily/every-other-day compendium of news articles put together by Leanan. She cites articles not for their correctness but to document what people are saying. The real deal is in the comments.

        An ambulance can only go so fast - Neil Young

        by mightymouse on Thu Mar 22, 2012 at 07:50:39 AM PDT

        [ Parent ]

  •  It is much worse - GOP would bomb Iran (0+ / 0-)

    - please imagine how gas prices would look then! After the entire oil region is thrown into war, all middle eastern countries are switched back into Anti-American hatred, the Arab Spring be completely destroyed and so on

  •  What is often forgotten is... (3+ / 0-)

    in the event of a significant increase in US production, OPEC might see fit to dial down their production to keep the market price high.

    Another point: while Charles Krauthammer poo-poos the idea that reducing our oil usage will lead to a significant reduction in prices, what he and others fail to understand is that prices per se are not the critical thing for the American consumer. Rather it's the actual cost of operating a car or heating a home: if you do that more efficiently, the prices can increase but your actual out-of -pocket costs can still be less.

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Wed Mar 21, 2012 at 06:55:58 PM PDT

  •  As pointed out on the Thom Hartman show (0+ / 0-)

    gasoline is America's number 1 manufactured export item. Do you think that might have an effect on our prices at the pump?

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Wed Mar 21, 2012 at 06:59:21 PM PDT

    •  exported gasoline made from imported oil (1+ / 0-)
      Recommended by:
      ZedMont

      Thom left out a key piece to the puzzle.

      There is a lot of bad journalism about oil.

      This article is good:

      Why Energy Journalism is so Bad

      One of the questions that plagues me constantly is, “Why is energy journalism so bad?” Most mainstream articles about energy will leave you horribly confused at best, or horribly misled at worst. Today I will try to teach you how to read reports on energy without getting lost.

      An ambulance can only go so fast - Neil Young

      by mightymouse on Wed Mar 21, 2012 at 08:24:25 PM PDT

      [ Parent ]

      •  Wait one minute what difference does that make? (0+ / 0-)

        Oil is a fungible commodity, it doesn't matter where it is produced. We are still importing almost half of our oil and they tell us our price at the pump is only based upon overall domestic production of refined fuel versus demand. When we still export a significant part of our refined oil product capacity it becomes a huge contributing factor to our end price at the pump. It sounds like you are the one trying to confuse the issue.  

        Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

        by RMForbes on Thu Mar 22, 2012 at 05:49:18 PM PDT

        [ Parent ]

        •  it matters a lot where it is produced (0+ / 0-)

          if a US refiner buys oil on the world market, for sure they will SELL some of the product on the world market if the price is right.

          US refiners have no obligation to sell refined products from imported oil to the US only.

          You seem to be arguing that US refiners should pay top dollar for crude on the world market, refine it, and limit their sale of products to the US only, regardless of whether they can get a better price elsewhere. Why would they do that?

          plus people who hear only "we are a NET EXPORTER of refined fuels" can miss the bigger story, that we are much larger net importer of the crude from which those fuels are refined.

          An ambulance can only go so fast - Neil Young

          by mightymouse on Thu Mar 22, 2012 at 09:25:46 PM PDT

          [ Parent ]

          •  No that changes nothing (0+ / 0-)

            The value of a barrel of oil is the same no matter where it comes out of the ground. The gasoline refined by a Texas refinery from oil produced from a Texas well costs no less than oil coming from Saudi Arabia. We are not just a net exporter of refined fuels, IT IS OUR NUMBER 1 EXPORT!!! Which of the oil cartels do you shill for?

            Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

            by RMForbes on Fri Mar 23, 2012 at 05:32:51 PM PDT

            [ Parent ]

  •  While drilling alone may not alone be the solution (0+ / 0-)

    This is no argument for not acting to improve supply (at least in the short term)  We should seek a broad-based strategy of improving long-term energy efficiency and independence.  

  •  That big drop in Oct 2008... (0+ / 0-)

    ...was engineered by the speculators to try and help John McCain. It failed, but it also proved that the pump price COULD be manipulated, when they wanted to.  Notice that supply was a constant.

    They did it for political reasons then, just like they're doing it for political reasons now.... to hurt Obama.

    These "Enron-like" assholes are lucky I'm not the President.  I'd send a SEAL team to adjust their attitudes.

  •  World's number one source of energy (35%) is oil (0+ / 0-)

    which is why oil prices cannot come down.
    Want to payless?
    Buy a hybrid or EV.

  •  in all states RW radio shills for big oil and is (0+ / 0-)

    ignored for that.

    it's a 24/7 ad for oil.

    in NM the giant limbaugh station puts on GOP sen candidate heather wilson (WTF?) on the local morning drive time show pandering a little to alternative energy but basically working for big oil once she gets in.

    This is a list of 76 universities for Rush Limbaugh that endorse global warming denial, racism, sexism, and partisan lying by broadcasting sports on Limbaugh radio stations.

    by certainot on Wed Mar 21, 2012 at 08:20:10 PM PDT

  •  Not (0+ / 0-)

    Sufficently Yaybama, nor sufficiently Santorum guffawing for this site's current desired demographic.  Next time, throw in a picture of an etcha sketch and a joke about a dog strapped to a station wagon.  

    I will not send money to, work for, or vote for, any candidate whose behavior benefits the 1% over the 99%. Work for my vote, money and time, or lose it. Not the other way around.

    by Nada Lemming on Wed Mar 21, 2012 at 09:09:51 PM PDT

  •  Supports would be more accurate than confirms. (0+ / 0-)

    The conclusion is correct, there's a little data problem, however.

    The huge Prudhow Bay oil field came online commercially in 1977. It peaked in 1989 and has been declining since.

    So.....

    You get a couple of funny things happening to noise up your data.

    1.  Our last great influx of fresh oil coincides with the Arab oil embargo, which shot prices up, and goes into decline afterwards.

    2.  Additional activity in more mature fields will be price-sensitive: if the price of oil goes up, you can justify the higher cost of additional exploitation

    3.  Refining capacity exerts an additional influence on prices

    4. A little circularity problem from using inflation-adjusted prices: gasoline prices are part of the consumer price index, AND energy costs ripple through to other prices as well.

    To see what this does, imagine a CPI with gasoline as it's only component.  If the price of gasoline goes up from $1 a gallon to $100 a gallon, using that CPI to adjust for the price of gas would always say there has been no increase.

    The US market basket includes transportation, in which gas prices directly affect the index as fuel and indirectly affect it as a component in airline and other travel costs.

    It includes food, which incorporates fuel prices through transportation costs.

    And, as a kicker, anything that uses plastics or petrochemicals will be affected as well.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Thu Mar 22, 2012 at 01:05:32 AM PDT

  •  This is one of your very best MB. Demonstrating (0+ / 0-)

    - as always - that you are who you are, because you do not buy into the babbling BS that is shoveled upon us.

    KUDOs.

    PLEASE, by all means possible, THINK for yourself? Then make a difference in the world; by doing something good for someone else today.

    by laserhaas on Thu Mar 22, 2012 at 04:02:59 AM PDT

  •  The Price of Koch Brothers Rackets (0+ / 0-)

    Oil prices are being kept high by people like the Koch Brothers who choke the supply lines with their infrastructure while manipulating the economics with their money. It's just like Enron's business model, which held both the actual delivery systems (gas pipelines) and the markets (trading exchanges) in the sway of themselves and their cartel. Creating artificial supply shortages by holding back plentiful supplies to deliver when the price peaked, and working the spreadsheets to keep the price peaked.

    It's also the same as during the 1970s oil crisis, which most Americans gradually heard was caused by full oil tankers floating offshore while gas lines formed around the block onshore.

    But despite all this known history and revealed current events, it's working perfectly for the Koch Brothers and their ilk. Because the Federal and state governments have learned that the racket pays off for them, too, so they don't do their job stopping it.

    The FTC is wrapping up its investigations after a year, and the Justice Department is now investigating. We will see if a president fighting for reelection against a top obstacle like gas prices can call out the top sponsors of his political enemies, who have abused him since before he was first elected. If the collateral damage is lost energy profits, maybe not.

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Thu Mar 22, 2012 at 05:14:00 AM PDT

  •  Supply isn't the only price driver (1+ / 0-)
    Recommended by:
    Roger Fox

    Actual demand does fluctuate, as well as availability of refining capacity (which is often deliberately jiggered to increase prices).  

    One of the biggest drivers though is fake demand from speculators, who all need to be driven out of the market permanently.

    Atheism is a religion like Abstinence is a sexual position. - Bill Maher, 2/3/2012

    by sleipner on Thu Mar 22, 2012 at 09:55:30 AM PDT

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