Now who’s a socialist?

No one ever mentions that you can’t guarantee lower gas prices just by drilling.

The only way to guarantee lower gas prices is for the government to tell the oil companies they have to sell the oil in the US and then tell them how much they can charge for the gas.

Are the people who talk about drilling really advocating nationalizing the oil companies?

Fun facts

There are already tens of millions of acres of oil fields leased but not being developed.

Oil taken out of the Gulf of Mexico does not come to the US, and the US gets no royalties for it.

Drilling on the Outer Continental Shelf would reduce the price of gas by $0.03 per gallon by 2030. (source: the US Energy Information Administration)

Just letting oil companies drill more – even if they would – is not the answer.

Gas prices

If you need evidence that it is commodities trading and not supply and demand that drives oil prices, just go fill up your tank. The current crisis in Libya has not appreciably affected the oil produced by that country. Libya provides about 2% of the world's oil, they are producing at close to pre-crisis levels, and Saudi Arabia has promised to increase their production to meet any shortfalls. So the supply hasn’t decreased, and the demand certainly hasn’t shot up in the last week.

There haven’t been any major problems with global oil production to drive up oil prices. Current global production is actually very high – domestically we have been increasing production for years, yet the prices jump.

The reason is that oil is traded as a commodity on the futures market. You aren’t paying for gas, you’re lining the pockets of futures traders.

There used to be position limits on futures trading for oil. Not any more.