Editor's Note: This article originally appeared in the Huffington Post.
Are gas prices impacted by the source of countries' oil? The graphic below, from Oceana, suggests that how much oil a country imports does not affect gas prices.
Rather, the group "found that while gasoline prices vary greatly among these five nations, the variation is almost entirely attributable to variation in gasoline taxes," according to an Oceana email sent to HuffPost. "Once these taxes are factored out, gasoline prices are largely the same across the five nations, despite marked differences in how much oil is sourced domestically versus via imports. This shows that gasoline prices are largely independent of how much oil a country imports or produces domestically, or, in simpler terms, we cannot drill our way to lower gasoline prices.”
A 2012 study, of "36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production," by the Associated Press found that there is "no statistical correlation between how much oil comes out of U.S. wells and the price at the pump."
A May report from the Natural Resources Defense Council found that if built, the proposed Keystone XL pipeline could actually raise domestic gasoline prices, reported HuffPost's Lucia Graves. Report author and NRDC attorney Anthony Swift said, "Our study has found that Keystone XL is likely to both decrease the amount of gasoline in U.S. refineries for domestic markets and increase the cost of producing it, leading to even higher prices at the pump."
Earlier this week, Reuters reported that the average price of gasoline in the U.S. fell nearly 16 cents in the previous week. The drop is a result of a decline in crude oil prices, fueled by "fears over Europe's economy and a stronger dollar," according to Reuters. A recent survey of Americans by The Associated Press-NORC Center for Public Affairs Research found that three quarters of Republicans and 34 percent of Democrats "cite government limits on drilling as a major reason for energy problems."
Two newly released reports shed some much-needed light onto a crucial question in Washington: Does domestic oil drilling affect gasoline prices?
That question lies at the heart of the debate over what we should do about high and volatile gasoline prices. Advocates for oil drilling call for broader and quicker access to our nation’s resources in order to provide relief at the pump – calls that the House has happily obliged by passing bills that would open up new areas to offshore drilling and undercut government oversight. Environmental groups and other opponents of domestic drilling, on the other hand, argue that this is the wrong approach, and that we should instead be investing in fuel efficient vehicles and alternate modes of transportation.
The two new reports provide much-needed objective and nonpartisan analyses of this crucial question, and come to the same, clear conclusion: providing relief at the pump to U.S. consumers can only be achieved through reducing our oil consumption, NOT through more domestic drilling.
The reports were issued by the Energy Security Leadership Council (ESLC), a nonpartisan project of Securing America’s Future Energy that’s composed of industry CEOs and retired four-star generals and admirals, and the Congressional Budget Office (CBO), which provides nonpartisan economic analysis to Congress. They join a growing list of impartial publications that refute the notion that the United States can drill its way to energy independence and free ourselves from the myriad problems associated with our oil consumption and offshore drilling.
With gas prices on the rise, the blame game is in full swing. Some in the media and in the government are saying increased drilling will lower gas prices. It turns out this isn’t the first time we have heard this argument, and liberals and conservatives alike agree that it is just not true.
But don’t take my word for it, listen to Fox News!
They are right! No amount of drilling here in the United States can lower the price of a gallon of gas. We just aren’t a big enough supplier, though we’re number one when it comes to demand.
Try as we may, we will never control supply – we can, however, decrease demand. Improving efficiency, promoting conservation, and transitioning to renewable sources of energy like offshore wind are the only ways to achieve a secure and affordable energy future. Using less is the only way to lower the price. Just ask Bill O.
In 2008, he gave his viewers sound advice: “If Americans want lower gas prices, cut back. Sell those SUV’s. Ride a bike when you can. If every one of us bought 10% less, prices would fall fast.”
Editor's note: This post by Oceana CEO Andy Sharpless was originally posted last May on Politico.com. We think it couldn't be more relevant right now, especially considering that many media outlets are now making similar arguments to the one we've been making since last year - that gas prices aren't tied to offshore drilling.
Why do we take terrible risks to drill for oil in the Gulf of Mexico and elsewhere along our coasts?
Most people would say we drill to protect ourselves from big fluctuations in gasoline prices that are caused by major upheavals in the Middle East.
Their argument is that the more oil we can produce domestically, the lower the price we’ll pay at the pump. It’s not that they like the sight of oil wells off our beaches. The main reason they argue for more offshore oil drilling is they think it will save money — especially since gas prices approached $4 a gallon recently. (See: A chart of U.S. gas prices here.)
Andy Sharpless is the CEO at Oceana.
What will lower your gas prices at the pump?
If you were to listen to national politicians and the marketing of the oil and gas industry, they would tell you that increased domestic drilling will lower your gas prices – and that tax breaks for oil companies will help get us there.
But this simply isn’t true, and it’s been proven time and time again. Oil is a global commodity hunted and extracted by multinational corporations who will sell the oil to the highest bidder, not simply to the citizens of the country where the oil was found. What’s more, the U.S. is a relatively oil-poor country – estimated to have 2 percent of world oil reserves – so even extracting all its oil resources will affect pump prices only by pennies, and will take a decade to be realized.
The oil industry is currently enjoying $4 billion a year in tax breaks from the U.S. government. Surging profits this year for the industry – up 74 percent to more than $100 billion – show that it could easily pay its fair share of taxes. Even if we weren’t currently having a national conversation about balancing the federal budget, this policy is not sensible.
So it was with pleasure last week that I stood outside the U.S. Capitol along with five U.S. senators, six representatives and the Sierra Club to speak out against tax subsidies for oil companies.
By ending billions in tax breaks for oil companies, the U.S. government will protect American taxpayers as well as our beaches, paving the way for a clean energy future.
We'll continue to fight for this crucial change. Your support makes it possible.
Andy Sharpless is the CEO of Oceana; this post also appeared on Politico.
Why do we take terrible risks to drill for oil in the Gulf of Mexico and elsewhere along our coasts?
Most people would say we drill to protect ourselves from big fluctuations in the price of a gallon of gas that are caused by the major upheavals in the Middle East. Look at this chart (data from the Energy Information Administration):
Their argument is that the more oil we can produce domestically, the lower the price we’ll pay at the pump. It’s not that they like the sight of oil wells off our beaches. The main reason they are doing so is they think it will save them money – especially as gas prices approached $4 a gallon recently.
This idea is not only intuitively appealing, it is repeatedly, and unambiguously, promoted by important government officials from both parties. Sen. Mary Landrieu (D-La) defended new legislation that would expand offshore oil drilling, saying “this bill would do more to lower gas prices at the pump than any other plan.” Sarah Palin criticized President Barack Obama, “His war on domestic oil and gas exploration and production has caused us pain at the pump.”
For the PDF of this factsheet, click here.
Myth 1: Offshore drilling is safe.
The Deepwater Horizon Drilling Disaster is not an isolated incident and offshore oil drilling is extremely dangerous. Since 2006, the United States Minerals Management Service reports that there have been at least 21 offshore rig blowouts, 513 fires or explosions offshore and 30 fatalities from offshore oil and gas activities in the Gulf of Mexico.
Just last year, a new offshore oil drilling rig off the coast of Australia had a blowout similar to the one on the Deepwater Horizon rig in the Gulf of Mexico. The Australian rig spewed approximately 16,800 gallons of crude oil daily into the Timor Sea for about 75 days.
As we can see with the Deepwater Drilling Disaster, safety measures and so-called “failsafe” mechanisms can fail, and when they do, we do not have the technology to stop ongoing oil releases, nor are we capable of effectively cleaning them up.
