Lets Talk Oil Half-Truths

Recently we have heard numerous statements being presented as “truths” regarding the ever increasing price of gas.  Actually these excuses are  half-truths which  break down into 5 categories.  All patriots should understand how to counter these half-truths with actual facts, so here goes:

(1)  “Oil production is the highest its been in 8 years.”  This statement is true, however not because of anything to do with the federal government or its policies. Oil production in private industries on private land is at an 8 year high. The increase in production is occurring in states such as North Dakota, Alaska and Texas.  On federal land and in offshore drilling, oil production is down 40% compared to 10 years ago.

(2)  “Increase in oil production takes too long and would not impact the market for at least a decade.”  While true there tends to be a lag time between production and market price, often with the knowledge of increased drilling, the markets will react with lower prices or at a minimum a stabilization of crude prices.   In addition, the federal government can impact how quickly known  deposits of  crude can reach markets by speeding up the permit process which now can take years.

(3.)  “America has only 2% of oil resources across the world.”  The 2% spoken about in this quote is proved oil reserves, which is oil currently being drilled for in existing fields.  The Energy Information Administration (EIA), sub-department of the Department of Energy, has stated this 2% “are a small subset of recoverable resources.” Created from EIA information:

(4.)  “Country needs, all of the above approach to reduce its dependency on oil.”  While it is true that every approach to enlarge our energy capacity should be utilized, the truth is the federal government should not be providing subsidies to private industries.  Innovation occurs through market forces, new energy options will be developed when there is profit for private companies, anything else is nothing more than  corporate welfare.  Plus the federal government has not proven itself capable of picking winners in private industry, examples would include Solyndra or the lesser known but still failed Evergreen Solar or SpectraWatt.  Subsidies (corporate welfare) for energy:

2.8 billion oil/natural gas

5 billion wind

6 billion biofuels

(5.)  “Speculators drive up gas prices.”  Higher prices are honestly a simple case of supply/demand.

 

Knowledge is power.  To discuss oil policy or gas prices visit our forum.

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