$5 a gallon gas? Say it ain't so!

Urban legend my duppa.

Try this link from the San Francisco Examiner:

SF Examiner

Or this one from the institute for oil research:

InstituteForOilResearch

So why is oil going to be $5 per gallon? Because our government will not drill! Apparently we would rather purchase from countries that hate us.

If the oil market was regionally based where each country produced and consumed its own resources before going to the global market then your links might be remotely relevant. But thats not the way it works.

ANWR oil would not go exclusively to the US - it would go to the world supply and be bought and sold at the world supply prices.

You can make an intelligent argument that ANWR would help our trade deficit (which is why I support it). But you can not make an intelligent argument that it does anything to noticeably affect the price oil and gasoline. That is a joke which is easily made transparent when you look at the world supply/demand volumes and how little it is affected by this additional reserve.

The country's best defense against rising oil prices is to use less of it. But the "Drill, baby, drill" argument fits in nicely with the special interst agenda of the corporations that profit from it...

PJ - Have you ever taken an economics class?

ECON 101 --- If you decrease supply and demand remains constant (or increases) prices will increase.

We have decreased supply of oil in the short term (and longer term) by stopping drilling in the Gulf. So what happens? Gasoline hits $5 per gallon.

How could we ever solve this problem? Drill in the places where the US government will not allow it (i.e. Anwar or off shore).

Simple economics PJ and most Americans have no clue.

ECON 101? Yes, I have. More importantlty, I took junior high school math which taught me ...

... that increasing supply by 1% doesn't offset an increase in demand of 30%.
... and that cutting 60 billion dollars in earmarks doesn't reconcile 1 Trillion dollars in tax cuts.

It was a good class and one that would benefit the tea-party crowd very well.

But, if you increase prices, demand usually goes down.

Depending on the price elasticity of the product, of course (granted, gas is pretty inelastic in the short term). But still, while $5 gas will have negative consequences in terms of price increases for most goods and a shifting of more money overseas, it will almost certainly reduce gas consumption.

It will also make fuel alternatives more economically competitive, spurring their development and perhaps creating a long-term independence from foreign oil in the future. Those are positive consequences that shouldn't be overlooked in the equation. Consider $5 gas--if it happens--to be a necessary growing pain on the path toward hopefully weening ourselves off of fossil fuels.

It will also make locally-grown food and other products more economically-competitive. A big part of the reason companies do silly stuff like ship materials overseas to be assembled by cheap labor there, or bring in food from halfway around the world instead of the starving farmer down the road is because transportations costs are so cheap that it's worth it for the labor savings. If transportation costs go up enough, it will most cost-effective to do it all here in the US. Who knows, maybe that will have an offsetting, positive effect on the economy overall?

- Jeff

Not getting involved in this overall however PJ it is reasonable to assume IF oil was taken from ANWR that it would be treated just like all other oil taken from Alaska. In 1995 Congress passed legislation effectively ending restrictions on the export of Alaskan oil contained in the Trans Alaska Pipeline Authorization Act of 1973. From 1996 until 2000 approximately 5-7 percent of Alaskan crude was exported to Asia with South Korea getting approximately half the total and China and Japan the bulk of the rest. Since 2000, however, voluntary efforts have led to all Alaskan crude being shipped to the US.

Please note, once again, I am not advocating drilling in ANWR but merely pointing out it is reasonable, based on current practice, for the oil to go strictly to the US and not the world market.

Marc, you may very well be correct but any oil sold to the US or any other country from Alaska is sold at the current GLOBAL price. There isn't an independant market for U.S. producers to U.S. consumers. Perhaps if there were such a market ANWR might figure more into the price.

As it stands, the price is determined by the global supply vs the global demand and ANWR is simply a miniscule variable in that equation.

And I say all of this as someone who supports ANWR drilling despite being a tree-hugging-liberal-type.

Neither of these sources back up your claim: that China is drilling within 100 miles of the U.S. And no credible source will be able to verify it either. So you're just being played for a fool by the "news" sources that told you that story in the first place.

Your new year's resolution should be to stop repeating the lies you are told, and start processing information yourself. And another resolution should be to correct yourself when you are wrong.

Even President Cheney recognized that even optimistic projections of possible ANWR production would not make a significant impact on world oil prices.

In 2008, his Department of Energy admitted that "ANWR oil production is not projected to have a large impact on world oil prices."

All this heat and noise over ANWR is designed to distract Americans from achieving real energy independence, which will require a shift from such heavy reliance on fossil fuels.

Drilling ANWR won't make any meaningful difference in our energy problems.

So forkie - you call this an urban legend and provide no proof and I provide two links to prove my case.

Checkmate.

Chilcoot Provides a link about how Anwar is not a significant percent of world oil supply. Duh! But if we cannot drill offshore and cannot drill in Alaska, where will we get oil from? Iraq? Russia? Venezuela? I don't like those choices and "nudging" economies to do what YOU think is right (versus what the market thinks is right) is dangerous and will result in job loss and / or taxpayers picking up the tab.