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+Kiki Sanford was talking about this last night. The Republicans love to say "Drill, baby, drill!", but who are they helping by doing so? Certainly not people who actually work for a living, and are being squeezed by prices per gallon which approach $4. Instead, they're helping out their cronies in the oil and gasoline industries, who are raking in record profits.

And they're also helping out OPEC, whose membership includes several nations whose governments and people have no particular reason to love the United States.

So, why do we as a society keep falling for this bullshit?
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As one of the leading conservative intellectuals pointed out, "oil is made of fungible molecules and such as that don't have maps."

Oil is a fungible commodity. Increasing US production is not going to significantly impact the price of oil on the open market unless we significantly increase our production.
 
When oil companies post record profits, it should be obvious that it's not strictly the supply of oil that's driving the price of gas up.
 
So if we drill less and the US produces less oil, the price would go down? Clearly the conclusion of this alleged analysis is so wrong, it makes you wonder.
 
+Knox North, he point is that US produces so little of the oil currently on the market that we have no influence over oil prices.
 
+Knox North That's not what the article is stating at all. The article concludes that production in the US has very little impact on gas prices, whether production increases or decreases.
 
My take on the oil price situation is that the only fool proof way to lower prices is to lower the demand. Give up on petrol and move to alternative fuel sources. We don't have enough oil to last forever anyway. It's a limited commodity. And with all limited commodities, supply and demand are driving forces in the market. The mistake so many of these analysts make is assuming that supply is the part of the equation that needs fixing. It's not.

It may not seem that way, currently, with the way oil companies are raking in the profits (why are we subsidizing them again? Hm...). But they're pumping up prices because the demand is high enough that people will actually pay those prices. If there weren't enough people willing to pay those prices, oil companies would have to drop prices or risk losing profits.

Simple concept, but a difficult one to enact of course.
 
US oil production peaked in 1973, as predicted by M. King Hubbard 20 years previous. Except for a bump in the early 1980s when Alaska's production began, it's been mostly downhill ever since.

On the other hand, demand has only continued to rise, and we outstripped our production capability soon after our peak. World conventional production is at or past its geological limits as well. All the drilling rigs in the world (and none of them sit idle) has changed that or can change that.

The 2008 price spike happened when world demand overcame world supply; but when we cut consumption by 3%, oil prices fell by half within six months. That's our only way out now: use less oil. Park the SUVs permanently and telecommute, carpool, or (the horror!) take the bus 2-3 times a week. The only way well see $1.99/gal again is if we're not buying at any price.
 
I wouldn't argue with +tess caline's point that oil is a limited quantity, regardless of whether we've hit "peak oil" or not, and that conservation is worth consideration.

Know what lowers the price of energy (assuming no unlawful collaboration)? High energy prices. I heard something about this on the radio a while back, and the terrible part is that I can't recall the era, but I'm fairly sure it was prior to 1930. Gas prices were in the neighborhood of a dime, there was a crunch, and a subset of politicians advocated government control of supply and demand, citing fears that gas prices would soon hit a dollar a gallon. Prices did increase, creating incentive for innovators to improve refining processes and alternatives. While prices didn't fall to the original levels, the market corrected. A truly free market is an important part of that, and a part I don't know whether we can reach again or not. But, I'd like to think it's possible.

On a side note, if you index history to the price of gold, nothing is really out of line price wise. Our dollar is just worth one tenth of a tin shit right now. And the discussion of why that is the case is too long to get into, and something I haven't even spent sufficient time to fully understand, but the short story is: Fiat currency sucks.
 
+Landis Vinchattle -- the reason that high prices work is because they lower demand. People turn to alternatives instead of buying the more expensive thing. Which was exactly my point.

If you want the price of gas to be lower, stop buying gas. Use an alternative power source -- electricity, hydrogen fuel cells, solar, whatever else. Only after people do that in enough quantity will the gas prices go down.

I'm not preaching "conservation". I'm preaching economics 101.
 
I understand supply and demand, but if demand readjusts as soon as supply is available, nothing really changes. That's where we are at now. You either need a huge increase in supply (or a multiplier in efficiency to effectively multiply the supply) or a new direction that makes financial sense. We don't really have either of those yet.

I don't care what the price of gas is. Those that have it can sell it for what they like. I may not like their ethics, practices, or methods, but I have the right to create an alternative if it bothers me enough. I don't think people will change their consumption until they literally cannot afford not to, even on credit. At that point, we'll see some real changes in the way things work.
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