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Oil Spill's Effect on Gas Prices
The oil rig that’s leaked thousands of gallons of oil into the Gulf of Mexico is a real environmental tragedy. It’s not a made up scientific problem like man made global warming which has made some of those who espouse it’s fallacious harm millionaires.
But what affect if any, will it have at the pump when we fill up our automobiles with gasoline? Most would think it would have to have a negative affect and therefore drive up the price.
The truth though, is that it most likely will have very little impact on gasoline prices.
The rig that sprung the unstoppable leak was not producing oil for usage. It was still in the drilling stage and is one of thousands of oil rigs in that area.
Even if the rig was on line producing oil to be used for gasoline and a host of other potential uses, the US uses some 20 million barrels of oil per day and only 30% of our usage comes from that area.
The sluggish American economy has kept travel of all types (air, land, water) at low levels the past couple of years and that trend should continue for at least a while longer.
Less usage usually equals lower prices, but OPEC (The Organization of the Petroleum Exporting Countries) can also control production by lowering output and stopping production of oil at certain facilities and therefore can artificially keep prices high.
Most experts agree that the short and long affects of the oil spill will not have an effect on gas prices. Lot’s of money will be needed to continue clean-up efforts that will continue for years to come, but that will not come from raising gasoline prices.
Environmentalists can point to the tragedy and try to influence lowering production and accelerating other forms of renewable energy, but that is a mistake.
This country and it’s economy is not ready for that type of change as both wind and solar energy have extremely high costs and low production when compared to oil, natural gas, coal, and nuclear power.
The real solution is to allow for drilling closer to the shore where the rigs don’t have to drill 13,000 feet below sea level which in itself is challenging.
There’s also plenty of untapped oil reserves in the ANWAR section of Alaska as well as millions of gallons available to9 be tapped from shale throughout the country.
The oil spill is an unfortunate tragedy. But it shouldn’t be used as a political tool to drive agenda’s either for or against more drilling. Instead the questions that must be asked are, “what went wrong” and “how do we keep it from happening ever again.”
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Content copyright © 2013 by Stephen M. Hague. All rights reserved.
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