Gas Prices:Yet Another Lesson in Supply and Demand

By August 8, 2006Energy

We have consistently made the point here about the immutable law of supply and demand, especially as it impacts energy prices — a concept the entire Congress isn’t grasping just yet. But with news of the disruption in the oil pipeline in Alaska sending prices higher, doesn’t it stand to reason that if we allowed exploration in ANWR, it would drive prices lower?

Remember ANWR is a place the size of South Carolina and the drilling would happen in a footprint one-fifth the size of Dulles Airport. Had President Clinton not vetoed the ANWR drilling bill ten years ago, the first oil would be here.

Maybe someday policy-makers in Washington will understand that it makes no sense to be the only country in the world that limits access to its own natural resources — especially when our competitors have no such qualms. If we increase supply, it will undoubtedly impact price.

Live and learn? We can only hope.

Join the discussion One Comment

  • Jefe Montana says:

    “the immutable law of supply and demand”

    It is foolish to assume oil prices have anything to do with normal supply and demand. The primary force driving oil markets is fear.

    Drilling for oil in the Arctic National Wildlife Refuge will only increase our dependence on oil, and serve the same Big Oil interests that keep America oil addicted.

    The more dependent on oil we are, the more dependent we are on foreign oil, because America simply does not have the resources to supply ourselves. America accounts for 25% of the world consumption of oil, yet we have only 3% of the world’s oil resources. There is no way to close that gap, ever.

    Even scarier, from our minute 3% of the world’s oil resources, we currently supply 8% of world production. In other words, we are using up what little we have faster than any other country in the world.