The Associated Press just released findings on a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production that found no statistical correlation between how much oil comes out of U.S. wells and the price at the pump. And there you have it. In essence, drill, baby drill is just a pipe dream. Literally.
According to AP, “If more domestic oil drilling worked as politicians say, you’d now be paying about $2 a gallon for gasoline. Instead, you’re paying the highest prices ever for March.”
So why doesn’t domestic drilling lower the cost of gas at home? Oil is a global commodity and gas prices are subject to global actions that U.S. producers cannot control. Unrest in the Middle East and the increase of cars and production in China and India are two factors that contribute to rising gas costs.
According to oil analysts, if drilling increased around the world, that could certainly lower the cost of gasoline, but the US drilling more on its own could not have the same effect.
American oil production is about 11 percent of the world’s output, so even if the U.S. were to increase its oil production by 50 percent — that is more than drilling in the Arctic, increased public-lands and offshore drilling, and the Canadian pipeline would provide — it would at most cut gas prices by 10 percent.
The next time a politician promises to lower the price at the pump, trust the facts and know that that just isn’t possible.
Read the full AP post here.