- It was $1.00 under Clinton when drilling was lowest.
- It was $3.30 when drilling peaked under Bush.
- It was $3.90 with drilling sky high under Obama.
What’s Wrong with the Drill-Baby-Drill Theory?
|Newt’s $2.50 gas for China⇒|
- It’s only about US Oil Supply (drilling).
- But supply and demand determine the price.
- What Newt told Fox News: “I have a $2.50 goal as a maximum price. … we outline step by step how to do it. I think it is doable.” Doable?! $2.50 for gas means $1.50 for oil (see the Iron Rule). And $1.50 times 42 gallons/barrel = $63/barrel — a little over half what it costs now. And Newt will make that the maximum price of oil for the world from now on. Sure thing, Newt.
Here’s What Happens Instead:
- Demand for oil goes up (think, China, India and Japan).
- The price of oil goes through the roof.
- Big Oil smells profit and starts to drill like crazy.
- Drilling is up when price is up, like the graph shows.
- Drilling keeps the price about a nickle lower than “it would have been.”
- You get the nickle, Exxon gets $10 billion.
In a nut shell, here’s the awful truth:
- China uses more, and Our gas price goes up.
- We use less and drill more.
- Exxon ships the extra gasoline to China! — See for yourself.
zFact: The price of gas equals the world price of oil (per gallon) + $1.00. (Strange, but true for 30 years.)