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National Embarrassment Sarah Palin Doesn’t Know How Gas Prices Work
In a recent appearance on Fox Business, Sarah Palin tried to blame Obama for the rise in gas prices, but she embarrassed herself with reasoning that revealed that she has no idea how gas prices really work.
Here is the video:
Sarah Palin accused Obama of intentionally manipulating the price of energy, “But rising gas prices — there is an inherent link, David, between energy and security, energy and prosperity, and energy and freedom, and this is something that obviously our president doesn’t understand because he’s doing all that he can to manipulate the U.S. supply of energy. He is diminishing and decreasing the amount of energy in our market domestically and that, of course, resulting in prices that are rising and gas having doubled since he has been in office.”
She continued, “He’s absolutely on the wrong track. So, you have the rising cost of energy and you have the job situation, which is proving that his agenda towards some social engineering, some manipulation of the marketplace, is not working.”
Sarah Palin is claiming gas prices have not gone down because Obama won’t drill baby drill. Apparently Sarah Palin doesn’t understand the energy market at all or else she would know that the idea that we can drill our way to lower gas prices is a myth.
There are two problems with drill baby drill. According to a 2007 US Energy Information Administration study even if we drilled in every available area of the United States, it would not change the price of a barrel of oil, “The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”
In short, the US can’t produce enough oil to influence the price in the global market.
This leads us to the second fallacy in Sarah Palin’s argument that the oil drilled here in the US stays here. The oil that is extracted from the US belongs to the oil companies, not the US. All oil that is drilled for here goes on to the market and adds to the global supply. The oil companies are free to sell it to whoever they want. On top of this, that the US uses over 19 million barrels of oil per day. It produces 5.5 million barrels of oil a day.
If we were to follow Palin’s advice we could add another 2.4 million barrels of oil a day, which would cut our daily oil deficit to over 11 million barrels a day in 2030. Since our consumption is constantly increasing, any oil we would produce would be offset by increased consumption with the result being that drill baby drill does nothing to help the price of gas.
There is nothing that any president can do to lower short term gas prices. Because America consumes more than it produces, we have no choice but to continue our dependence on foreign oil. If the US keeps doing what it is doing, it will always be vulnerable to global oil market price spikes. The only way to not suffer from $4 a gallon gas is to use less oil, and the way to use less oil is through the development of alternative energy.
Sarah Palin’s drill baby drill was debunked in 2008, but this hasn’t stopped her from trotting out her placebo of an energy solution every time she is given the chance. Palin is supposed to be an energy expert, but she doesn’t understand how global energy markets work. Her criticisms of Obama were childish and ridiculous to anyone who doesn’t buy into the lazy man’s fantasy that we can drill our way out of this problem.
Sarah Palin is an energy expert who doesn’t understand where the price of gas comes from. How much longer is she going to continue to embarrass herself on the national stage? Palin has a toddler’s grasp of energy policy, yet she continues to hang on to her White House delusions.
Just like Sarah Palin herself, drill baby drill is an idea that is stale and past its sell by date.