Thursday, April 26, 2012

The Current Oil Glut Proves that More Drilling Is Not the Answer

By Robert Gammon
Thu, Apr 26, 2012 at 12:09 PM

Gas prices in California and throughout the nation have jumped by more than a $1 a gallon since 2010. And Mitt Romney, the GOP’s presumptive presidential nominee, has been blaming President Obama, alleging that gas prices would be lower if the president had green-lighted more offshore drilling and the controversial Keystone XL pipeline that would bring tar sands oil from Canada to the Gulf Coast. However, a report this week by two-time Pulitzer Prize-winning journalist Eric Nalder reveals that there’s an oil glut right now, and that increasing the domestic oil supply will likely have no effect on gas prices.

In fact, the US is swimming in oil; the glut is so big that tankers are returning to the oil fields of Alaska with crude still in their holds because West Coast refineries simply can’t use it. Why? Demand for gasoline in the US has plummeted. People are driving a lot less than they used to, they’re taking mass transit more often, and when they do drive, they’re driving more fuel-efficient cars. Nalder reports that the demand for gasoline in the United States, as a result, has fallen sharply since 2007.

In other words, the US has no need to drill for more oil off of its coastlines or to build the Keystone XL Pipeline. Both are a waste of time and money and represent unnecessary and grave risks to the environment.

Tar sands oil extraction
  • Tar sands oil extraction

So if we have more oil than we need, why are gas prices so high? Nalder reports that the price of gas, unlike other commodities, has nothing to do with the demand in the United States. Instead, the price of oil is based on numerous global factors, including the increasing demand for fuel in India and China.

As such, the president of the United States has little influence on what price you pay at the pump — no matter what Republicans would like you to believe. And so when the GOP promises that putting Romney in the White House will result in lower gas prices, don’t believe it — although electing him more than likely will result in more offshore drilling and the construction of the Keystone XL.

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