Most Active Stories
- Le Show For The Week Of Mar. 15, 2015
- Peter Sagal Says New Orleans Is The Best — And He'll Show Us A Great Time Thursday Night
- The Irish Have Been Part Of New Orleans From The Beginning
- Argo The Police Dog Forces Carjacking Suspect Hiding Inside Cemetery Tomb To Surrender
- Episode 609: The Curse Of The Black Lotus
Thu May 10, 2012
More U.S. Drilling Wouldn't Lower Gas Prices Much
Originally published on Thu May 10, 2012 11:40 am
No matter how much oil the U.S. produces domestically, we'll still face huge swings in the price of gasoline. That's because there's a single, global price for oil.
This chart from a new CBO report shows gas prices over time in Canada, Japan and the U.S.
Canada produces all of its own oil; Japan imports all of its oil; and the U.S. produces some and imports some. Yet all three countries show the same wide swings in gas prices. (Absolute price differences are driven by different levels of taxes and fees in the different countries.)
Of course, more U.S. drilling could increase the global supply of oil, lowering the global price a bit for everyone. But more likely, according to the report, is that other oil producers would respond by cutting their own oil production, "diminishing or eliminating the effect" of increased U.S. production.
"Recently, for instance, Saudi Arabia announced that it would reduce its planned expansion of oil production in light of increased production in Brazil and Iraq," the report notes.