The administration claims there’s no “silver bullet” to lower gas prices and that they’ve kept rising in the face of higher domestic production, as if the law of supply and demand has suddenly been repealed.
It hasn’t, and increased production on private and state lands doesn’t blunt the impact on prices when 94% of federal onshore lands and 97% of federal offshore lands are off-limits to oil and gas drilling.
A key factor in gas prices is and always has been future supplies and potential disruptions to those supplies.
Another is the fact that we are the only major nation to deliberately limit domestic oil production even as war clouds and unstable governments place foreign sources in jeopardy.
We saw the effect of supply on oil and gas prices when oil prices fell by $2 a barrel overnight on a mere rumor that the U.S. and Britain might jointly tap their reserves.
On Monday, oil prices fell 2% as revived talks on Iran’s nuclear program eased fears of supply disruptions. Imagine the effect on oil and gas prices tomorrow if President Obama opened all federal lands and our vast reserves to oil and gas drilling.
After a brief rise in offshore oil production thanks to Bush administration policies, domestic production on federal lands has declined under Obama by 275,000 barrels per day from its 2010 peak and by 17,000 barrels a day since he took office in January 2009, according to a Congressional Research Service report.
The Institute for Energy Research reports that crude oil and lease condensate production on federal and Indian lands is 13% lower than in fiscal year 2010.
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In 2008, in response to record-high gasoline prices, both Congress and President Bush lifted the decades-long ban on offshore drilling. This opened the entire Pacific and Atlantic Coast to new offshore drilling.
When President Obama took office, the price of gasoline was $1.79 a gallon.
Look where it is now after he reversed Bush’s policy and restored the ban.