Gas prices rose sharply in 2008 as well as again in 2011, largely as a result of rising global demand and restricted supply.
People’s reactions were varied. Some called for immediate relief by means of gas tax rebates or improved oil drilling, both onshore as well as offshore. Others welcomed higher gas prices simply because they motivate auto companies to style and market more fuel-efficient cars, and consumers to buy all of them.
Even with gas prices now less than their peak last year, what should the US government do?
The oil companies and their supporters want the National government to remove some or all the remaining restrictions on onshore as well as offshore exploration and oil drilling. Doing so should result in more domestically produced oil and perhaps lower prices, but the connection isn’t that simple.
Experts have stated repeatedly during the last few years that increased domestic oil drilling may have no effect on gas prices on any given day and will reduce gas prices by just a few pennies a gallon by 2030.
The fact is, ramping up production takes so long, and also because the United States uses too much oil with as it is, increased production will only make a small dent in what we have now import.
Higher levels of creation, of course, mean increased dangers of oil spills, as we learned through the catastrophic BP spill in 2010. Hence, oil exploration safety is an important aspect that needs to be considered too. Additionally, importing more Canadian tar sands oil is unlikely to less gas prices in part because much of it will probably be shipped abroad.
The US uses about 20 percent of the world’s oil production and we now have 2 percent to 3 % of its proven oil supplies. So even with a strong push to get more drilling offshore, onshore, and within Alaska, the reality is that America can’t drill its way to domestic oil abundance and reduced gas prices. We will still need to import at least half of our oil from some other nations, and that means gas costs will reflect global demand and supply.
Without a lot of fanfare, the administration has done something far more prone to help consumers than removing limitations on oil drilling.
That is its historic agreement with auto companies last year and again in 2011 to increase fuel efficiency standards to 34. 5 miles per gallon by 2016 and also to 54. 5 mpg by 2025.
We have been seeing the results already, with great leaps in fuel economy within the 2012 models, and much more in the future as the recent Detroit Car Show demonstrated. A new Frd Fusion plug-in hybrid, for instance, is expected to get the same as 100 mpg.
By sipping gasoline more proficiently, U. S. demand for brought in oil should drop, but however this will not likely have much effect on gasoline prices. Rising global need for gasoline in India, Tiongkok, and other rapidly developing countries will overwhelm reduced consumption right here.
So we may as well get accustomed to higher gasoline prices. We may limit their economic impact, nevertheless, by buying more efficient vehicles and driving only just as much as necessary. We also can support an essential transition over time to alternative energy sources to power our own vehicles.