Presidential hopeful, Rep. Michele Bachmann (R-MN), claims that her election as president would mean lower prices at the pump:
“The day that the president became president gasoline was $1.79 a gallon. Look at what it is today. Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen.”
Is she right? Not in the sense of her implication that Obama is at fault.
Think Progress addressed this issue in June when Exxon claimed it had found abundant oil supplies in the Gulf. That “abundant supply” would provide only enough oil for 9 days worth of global oil consumption.
Setting aside that big ‘if’, while 700 million barrels is enough to ruin the Gulf if we get another blowout, it represents only 9 days of global oil consumption — and roughly one month’s worth of U.S. consumption.
The discovery doesn’t prove we have ‘abundant’ oil reserves, as Hastings claims. It proves the exact opposite, that ‘Drill, Baby, Drill’ can’t solve our problems. Steve Greenlee, president of Exxon Mobil’s exploration business, unintentionally admitted that when he said, “This is one of the largest discoveries in the Gulf of Mexico in the last decade.”
There just isn’t enough oil in the Gulf to make a dent in our addiction. A 2009 report by the U.S. Energy Information Administration, “Impact of Limitations on Access to Oil and Natural Gas Resources in the Federal Outer Continental Shelf” analyzed the difference between full offshore drilling and restriction to offshore drilling.
The EIA found that there is no impact on U.S. gasoline prices whatsoever in 2020. Gasoline prices would be a mere three cents a gallon lower in 2030. So much for Drill, Baby, Drill.
The fact is that that oil prices have been soaring in spite of the fact that U.S. domestic oil production has also been soaring, “to its highest level in almost a decade,” as EIA’s own data shows:
And, you should know that Barack Obama is not the only president to have seen gas prices double during his administration, and as you’ll see laid out in the linked article, gas prices are affected by the economy, as well as by supply and demand in general.
In January 2005 when Bush was inaugurated for a second time, gas cost $1.83 per gallon. That bargain didn't last long.
Gas prices shot up rapidly as the U.S. economy heated up and oil topped $100 per barrel. Gas soared to a national average of $4.11 in July 2008. That's a rise of about 125 percent.
Then the bubble burst.
Currently, gas prices are high (oil is again over $100 per barrel) because demand is high due to an economy that's heating up.
The takeaway is that an economy slowing or crashing means demand is lower so our gas costs less. An economy heating up correlates to higher prices at the pump as demand becomes greater.
Is that so difficult to understand?
Watch Rep. Bachmann spew: