Editorial: Shrill, baby, shrill?

Published 10:40 am Friday, March 23, 2012

 

Drilling for more domestic oil does not reduce prices at the pump. “Drill, baby, drill” was just false political rhetoric.

The Associated Press, with assistance from several economic and statistical experts, analyzed 36 years of adjusted-for-inflation gas prices and data from the U.S. Department of Energy on oil production and found no correlation between how much domestic oil comes out of the ground and the per-gallon prices motorists pay to refill their gas tanks.

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It seems that no matter whether a Republican or Democrat is in the White House, the opposing party blames the president for failing to do something about increasing gas prices.

The AP report even notes this: “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.”

In fact, U.S. oil production now is back to where it was in March 2003. Adjusting for inflation, gas would have to cost $2.10 today to equal the price it was then. But gas in Minnesota costs about $3.73, with the national average at $3.86.

It doesn’t take a rocket scientist to know that the U.S. produces only a small fraction of the world’s oil supply. If the United States of America increases production in an attempt to decrease prices, other oil-producing countries easily can decrease production to maintain prices. Oil is a global commodity. Price largely is controlled by supply, which in turn is controlled by a global cartel called OPEC. Other factors affect the price, too, from unrest in the Mideast to more demand in China and India.

America can impose its will on the global market of many commodities, such as natural gas and corn, but with oil, no matter how much we ramp up production, this country cannot drill its way to cheaper gas prices.

It can, however, continue to work toward development of automobiles that use domestic fuel sources, whether it is flex-fuel cars that take ethanol or cars that plug into a socket in the garage overnight.