Tags: oil | gas | Alaska | price

Don't Let Cheap Gas Fumes Cloud Our Domestic Production Thinking

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Thursday, 05 Feb 2015 08:17 AM Current | Bio | Archive

With gas prices at the pump hovering near $2 a gallon, many Americans are reveling in the belief that this represents a long-term shift to an oversupply of domestic gasoline resources. While it's hard to predict how long we will enjoy these lower prices, we all know how volatile the energy market can be. We are just a world crisis away from oil prices soaring again.

We don't need long memories to recall that inflation-adjusted oil prices reached an all-time low in 1998 (lower than the price in 1946)! Just 10 years later, in June 2008, oil prices were at the all-time high.

The pendulum swings back and forth with little provocation.

The Energy Information Association (EIA) notes that driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.14/gallon on Jan. 12, the lowest since May 4, 2009. U.S. regular gasoline retail prices are projected to average $2.16 per gallon in the first quarter of 2015. EIA expects U.S. regular gasoline retail prices, which averaged $3.36 a galon in 2014, to average $2.33 a gallon in 2015. The average household is now expected to spend approximately $750 less for gasoline in 2015 compared with last year because of lower prices.

The drop in gas prices is good news, but let's not overlook why these prices have fallen.

Since December, total U.S. crude oil production averaged an estimated 9.2 million barrels per day (bbl/d). Under EIA's price forecast, projected crude oil production will average 9.5 million bbl/d in 2016, which would be the second-highest annual average level of production in U.S. history; the highest was 9.6 million bbl/d in 1970.

Yet, even as U.S. domestic oil production reaches record levels, some people, including some of those in our government, are suggesting we take our foot off the throttle and push back on new energy initiatives, such as drilling in Alaska and tabling the Keystone XL Pipeline. What a mistake that would be.

David Holt, president of the Consumer Energy Alliance, was on my Made in America radio show recently and described the U.S. as an "arctic nation."

He suggested that America is in the midst of an energy revolution. History books will look back at this time as one defined by technology and energy innovation. The U.S. is dictating world energy prices.

But Holt warned that if we don't include Alaska in our energy policies, it would be a profound mistake and will reverse our energy leadership. Using domestic energy supplies makes the U.S. stronger by reducing our reliance on foreign energy.

The Obama administration continues to operate on a "zero sum game," proposing that we can't expand our domestic oil exploration because it destroys the environment.

Holt noted that even Alaskans, who are the most sensitive to the potential damage to their natural resources, understand that we can preserve our energy supplies while protecting the environment. This is a message that Washington can't seem to grasp.

America has done an exceptional job reducing our dependence on foreign oil. The key is discovering giant reserves of oil from shale and a responsible domestic drilling program for crude oil. We would be able to expand our energy supplies even further if Washington hadn't waged a scorched earth policy on U.S. coal mining.

Long-term planning has helped us become the world leader in energy, and it would be a colossal mistake to back off exploration and new technologies. We must not let our current low gas prices blind us to the critical need to step up production and exploration — not back down.

If we all want to enjoy lower gas prices and remain energy independent, which strengthens our security, we all must be willing to support domestic oil production — in all of its forms.

I think most of us "get it." But as usual, one person doesn't — our president.

As recently as 2012, President Obama was proclaiming that "we can't just drill our way to lower gas prices."

Talk about clueless.

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NealAsbury
With gas prices at the pump hovering near $2 a gallon, many Americans are reveling in the belief that this represents a long-term shift to an oversupply of domestic gasoline resources.
oil, gas, Alaska, price
663
2015-17-05
Thursday, 05 Feb 2015 08:17 AM
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