Easiest way possible to lower gas prices is sitting on the floor of the Gulf of Mexico, under some caribou in Alaska, and sprawling across Texas and Oklahoma.
Thats right, we drill our own damn oil!
The most basic tenets of market economies are the Laws of Supply and Demand. Therein you can find the following principle: As supply increases, price decreases as the market tends toward equilibrium. Restated, this means that if we increase the amount of oil in production, gas prices will tend downward. This is without the 1970's style lines at the pumps and violence over severely rationed gas. This self-same idea is behind GWB's requests that the Saudis raise production, or risk facing a partial embargo (military goods)as a sanction. More OPEC production would drive down the prices, but we would still be dependant on a foriegn nation, and anytime they wanted, they could cut production and raise prices back up. In order to ensure independence we need to increase drilling on US soil. There are massive amounts of oil in Alaska, including but not limited to, the wildlife refuge. The Chinese are drilling in the Gulf of Mexico, there is no reason we could not drill alot more there. There is even oil under US territorial waters. Scarcity of oil is the reason why prices are so high, so by increasing it's commonality we can drive prices down. In America, gas prices are highly inelastic, because a massive number of people live in rural areas, and even our metro areas are often so spread out that public transportation and bicycles are often literally impossible to use as alternatives. If you can use them, great and more power to you. I live 7 miles from the nearest town, there is no other option than to drive. The other issue with high gas prices is that it drives the prices of everything else up. No matter what, every good you purchase, and many services rely on fuel. Shipping, fertilizers, farm equipment, and even public transportation require
fuels.
A good explaination of basic economic theory can be found here.
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4 comments:
Scarcity of oil is the reason why prices are so high, so by increasing it's commonality we can drive prices down.
Not buying that one.
I am of the opinion that we just need to seriously find another alternative to oil/the culture in America that equates having expensive, inefficient cars with worthiness.
I can completely sympathize with the people who need cars to get around. I wasn't really close to much back home either. But the problem is not necessarily that we need more oil, but maybe that we need to reevaluate our society that is so dependent on the ideal of having two cars in every garage.
Americans in general live inefficient and wasteful lives. People don't NEED new cars every couple of years. People don't NEED Hummers. But these things are marked with the "status" stamp, and so Americans strive for them, even at the cost of being overly dependent on more natural resources than they need.
But instead of reevaluating, a lot of people are focused on just getting more to support this American habit. Because it wouldn't be good for the economy, you know, if people stopped buying so many cars. And so much gas. And so much other junk that they don't need.
In short, saying that we need to drill our own oil is an easy answer to a much more complex question. A question that may be uncomfortable to address, but necessary. Because let's be honest, oil reserves won't last for ever. Readjusting societal lifestyles would have a bigger impact than just drilling up some more oil.
Actually Amelia, you are right in the sense that a more efficient technology will eventually have to be created. But the entire macroeconomic problem is the issue of scarcity. Supply and Price have a an inverse relationship. The idea of the number of buyers is a demand side issue, I was attempting to attack this from the supply half of the equation.
I see your point and what you were trying to do, but I just see your solution from the "supply half of the equation" as inadequate. Simply supplying more oil will not solve the problem except for a few years, decades (I don't know for sure). I am just thinking bigger. Not that what you said was wrong in any sense, it just wasn't adequate if the goal is to solve this problem on a more permanent level. And for me, that is what the goal should be.
I agree with amelia about the "status stamp" completely. Just passing legislation to drill our own oil will get OPEC's attention and have them stammering to lower the price so we "wouldn't have to drill." If the oil is there, drill it. It's time to tell PETA and the crazy global warmists to shove it.
If global warming is such a problem, why is it 42 degrees outside at the end of May? If global warming was true, wouldn't it be in the upper 80s/90s? I'm scared because Ted Turner said in 25-30 years we will all turn into cannibals.
I agree that we need to find a long-term solution/alternative to oil, but that is being worked on and will take years if not decades to mass produce for consumers. We need a short-term plan as well.
I heard on Fox News Channel the other night that we are using exactly the same amount of oil we were using 20 years ago because of better technology.
By the way, most economists will tell you that the two biggest reasons for the spike in oil prices are: 1) the value of the dollar and 2) China and India demanding more of it every day as they become bigger economies.
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