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Gas Price Fixes that Won't

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More importantly, any effect from drilling in ANWR wouldn't be realized for many years. Even if legislation to tap the oil reserves were passed today, it would take years to reap the crude. An Energy Information Administration analysis in 2004 concluded that "between 7 and 12 years were required from an approval to explore and develop the coastal region of ANWR until first production." The peak production of 876,000 barrels per day wouldn't come about for another five years or so. So even assuming Congress gave the go-ahead today, the first oil wouldn't begin flowing until sometime between 2015 and 2020, with peak output half-a-decade later.

Logic Alert
Bush was inconsistent in explaining ANWR's potential impact on gas prices compared with other alternatives. A reporter asked Bush if he would consider temporarily ceasing the government's purchase of oil to fill the Strategic Petroleum Reserve (SPR). He responded:

Bush: I don't think it would affect price, for this reason: We're buying, at the moment, about 67,000 to 68,000 barrels of oil per day, fulfilling statutory obligations to fill up the SPR. World demand is 85 million barrels a day. So the purchases for SPR account for one-tenth of one percent of global demand. And I don't think that's going to affect price.

The numbers are right. The SPR takes away about 68,000 barrels of oil per day and according to EIA, world oil consumption is 83.6 million barrels a day. Furthermore, his conclusion that suspending the SPR purchases may not affect price is a fair one. Some experts have said it might, others dissent. As the Congressional Research Service summarized, gasoline prices "are sustained by a number of conditions" and they may remain unchanged "even if additional crude oil appeared on the market."

But the notion of tapping ANWR, the alternative Bush was pushing, can be dismissed using exactly the same logic. In fact, the EIA found in a 2004 study that:

EIA: "ANWR coastal plain oil production in 2025 is projected to constitute between 0.5 to 1.3 percent of total world oil consumption."

So according to EIA estimates, the oil that could gush from ANWR would actually supply as little as four tenths of 1 percent more of world oil consumption than the oil that would result from halting purchases for the SPR. Not much of a distinction, particularly since ANWR oil wouldn't begin peak flow for more than a dozen years.

Ramp up the Refineries!
The influx of crude oil alone cannot lower prices. Bush alluded to this, noting that "another reason for high gas prices is the lack of refining capacity." It's true that no matter how much crude oil you have, only so much can be processed into usable gasoline, depending on refinery capacity. And our current facilities are working at full tilt.

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Posted By: weraloc @ 05/12/2008 9:49:23 AM

Do you know the difference between a moral and an economic argument? For Clinton and McClain it is a moral issue not an economic one. Economists do not recognize morality, so leave their arguments out of it.
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Posted By: $2Gas @ 05/08/2008 10:05:54 AM

Demand $2 a Gallon Gas

Oil hit a new high of $120 a barrel on May 5, 2008.

The cost of making a barrel of synthetic fuel from coal is estimated to be around $55, including the sizeable infrastructure investments and the labor force necessary to operate the plant.

Petroleum poor Germany fueled WWII with synfuel from coal. It is proven technology.

America is the Saudi Arabia of coal with 1/3rd of the deposits on planet. We can eliminate dependence on foreign oil.
Reducing America???s trade imbalance, keeps money, technology and jobs here in America.

It is estimated that every billion in trade deficit equals 13,000 American jobs lost. $400 billion for oil last year: do the math.

And we can quit sending those billions to countrys that sponsor terrorism.

Synfuels are cleaner burning than gasoline and carbon sequestration can remove the CO2 hot house gases.

Visit http://governor.mt.gov/hottopics/faqsynthetic.asp

Ethanol from corn is a windfall for farmers but is it good for motorists.

After 4 months Congress is already rethinking. Unintended consequences include higher food costs for wheat, chicken, beef, pork, less grain for export, reduced gas mileage and incompatibility with older cars.

Harness your anger at the pump. Call or write your US Senators and demand a Manhattan Project to create an American synfuel industry within the decade.

If you don???t raise your voice the international companies, lobbyist and politicians will assume you are fat dumb and happy and ready to pay even more.

In Kentucky call

Senator Jim Bunning @

202-224-4343

and

Senator Mitch McConnnell @

202-224-2541
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Posted By: Driver of wagons @ 05/07/2008 1:51:05 PM

It was only a matter of time!

In this one move, the White House ended McCain's accountability for his use or abuse of the primary public financing system while putting him in position to take money for the general.

For this maneuver to have been arranged for the benefit of Senator McCain, of all people--the John McCain who has regularly, severely criticized the FEC as a "corrupt" agency--is a remarkable turn in his career as a reformer. A Commissioner who acted to enforce the law, to just raise an important question of enforcement, has been stripped of his post. This was clearly in Senator McCain's interest, this raw power play. It is also in his interest to have the FEC, back in business minus Mason, arrange for his money for the fall campaign.

He goes on to make a case that's going to be central to Obama's logic for forgoing public financing, despite his pledge to join the system: That McCain is a hypocrite on this reform issue.

For all the time that McCain has savaged the performance of the FEC, he has LED the sizeable crowd of critics who believed that the agency is too beholden, on the whole, to the narrow interests of parties and their candidates. Yesterday, Republicans could not have acted more narrowly in just this vein: effectively firing a Commissioner to immunize their Presidential nominee from enforcement action in a pending case but making sure that there is enough of an agency left to get him the money needed to finance his campaign.