How do we reduce oil prices?

Great Debates
1

In touting his new energy policy, George W. Bush claims that if we produce more oil domestically, prices will go down. But isn’t OPEC in complete control of oil prices? Whenever prices go down, OPEC just cuts production until prices start rising again. They’ve already slashed production twice this year, and may make another cut next week.

Americans currently use between seventeen and eighteen million barrels of oil a day. The cite below says that we would get less than five hundred thousands barrels a day from increased drilling in Alaska, so we would still be dependent on foreign imports. Is there any way that the United States can really avoid OPEC’s price manipulations?
http://www.epinet.org/webfeatures/snapshots/archive/2000/102500/snapshots102500.html

2

The constant whining in this country about the price of oil, and particularly about the price of gas at the gas station, is really pathetic to watch. Americans have about the cheapest petrol in the world, at least in the developed world, due largely to the lack of political will in this country to put a tax on gas commensurate with its effects on the environment.

Look at the prices of petrol in some other countries (prices often differ within countries, depending on location, but these figures represent the last ones i saw on visiting each of the countries in question):

Australia: $A 1.00/litre, or in US terms about $2.00/gallon
Canada: $C 0.80/litre, or just over $2.00/gallon
England: 70-80p/litre, or well over $4.00/gallon
(US figures based on approximate current exchange rates)

And don’t even get me started on the prices in Europe.

ITR champion mentions the possibility of drilling in Alaska. This would not only have little effect on the price of gas in the US, but the following statistics show that there are ways in which this country could save at least as much oil as would be gained by new drilling.

Gallons by which daily U.S. oil consumption would drop if SUVs’ average fuel efficiency increased by 3 mpg : 49,000,000 Source: Sierra Club (Washington)

Gallons per day that the proposed drilling of Alaska’s Arctic National Wildlife Refuge is projected to yield : 42,000,000 Source: The White House

Both of these are from Harper’s Magazine, April 2001, online at: http://www.harpers.org/harpers-index/listing.php3? sub_date=2001-04-01

See also

http://www.sierraclub.org/globalwarming/cleancars/index.asp

where the Sierra Club states that “Increasing the fuel efficiency of automobiles is the biggest single step the United States can take to reduce consumption of fossil fuels”, pointing out that more than 40% of US oil use goes to fill cars and trucks.

The statistics regarding the gas saved by more efficient SUVs versus the gas gained through drilling in Alaska point to another solution. As well as making SUVs more efficient, the government could begin to treat them as normal cars in terms of taxes etc, thus encouraging the 80-90% of SUV owners who have no need for a four-wheel drive vehicle to trade them in for something more fuel efficient and less obnoxious on the road.

michael.

3

You know, high gas prices aren’t necessarily a bad thing. If the price of gas gets too out of hand, what will people do? Drive more fuel-efficient cars? Use more public transportation in order to avoid the high expense of owning and operating a car? That would be terrible :rolleyes: !

4

Reduce the price by reducing demand i.e. more efficient cars etc, i have a small and efficient japanese car and my friend has a big 4 wheel drive, he is ALWAYS complaining that it drinks fuel.

sheeessshhh

5

The idea that increased domestic oil and gas production is somehow automatically cheaper than foreign production is utter nonsense. If Bush, who has a background in the industry, actually claimed this he’s even dumber than I thought.

The cost per barrel (42 US gal) of a given crude is a complex equation that must take into account the costs of finding a given field to begin with, the cost of developing the field, transportation costs and the amount of refining necessary to derive useful products.

In general, the cost of middle eastern crude is at the lower end of the spectrum, because the fields are huge and prolific, and relatively easy to get at. New production in Alaska is likely to be at the higher end, due to the relatively harsh climate. New production in the lower 48 will also tend to be high-cost (only smaller fields left to be found on on land, or expensive deepwater offshore fields).

As for reducing the price of oil, it’s painfully simple: use less.

6

What do you need a lower gas price for. The tax rebate should cover it. That Bush, hes always thinkin, 24/7. (struggles to fight off laughter)

7

You may find this slate article interesting. Not that I think oil prices are too high, but OPEC taking a lot of the rents by colluding isn’t too good. The gist of the article is that Bush likes OPEC and is happy for them to keep screwing consumers if it provides a convenient way of overcoming environmental objections to enriching US oil-owning interests.

8

Come to think of it, I LIKE the fuel prices where they are. As an Albertan, I don’t pay all that much for gas/heating, and the high prices are great for the economy. You wanna pay less for gas? Use less gas, genius.

9

As another Albertan, I agree with Max the Immortal. Current demand for oil means that the local economy is doing very well. Encouraging more efficient use of a finite resource through taxation is not the end of the world.