Doing the Math on Rising Gas Prices
While Speaker Boehner continued playing the blame game on gas prices yesterday, he declared that “the price of gasoline is driven by two factors. It’s driven by supply and it’s driven by demand.” Let’s look at the math:
Domestic energy production has increased, with the number of oil rigs in the United States quadrupling over the past three years and imports at the lowest level since 1995.
Demand for gasoline has declined by 17 percent from 391 million gallons per day in 2008 to 344 million gallons per day.
In fact, a new report out this afternoon shows the “U.S. was net oil-product exporter in 2011“:
The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949, the Energy Department said today.
Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day, the department said in the Petroleum Supply Monthly report. In 2010, daily net imports averaged 269,000 barrels.
Total crude and product imports fell 11 percent from a year earlier to 8.436 million barrels a day, the lowest level since 1995, department data showed.
U.S. refiners exported record amounts of gasoline and distillate fuels, including heating oil and diesel, to meet higher global fuel demand while U.S. gasoline consumption sank and distillate was little changed…
The U.S. will ship abroad 350,000 barrels a day more petroleum products that it imports in 2012 and 320,000 barrels daily in 2013, according to the department’s Short-Term Energy Outlook report released on Feb. 7.
If supply is increasing and demand is decreasing, why are middle class families facing so much pain at the pump? Commissioner Bart Chilton with the Commodity Futures Trading Commission has the winning answer–Wall Street speculators:
According to Chilton, much of the problem is actually “made in the USA,” created by Wall Street traders who gamble on oil prices….By Chilton’s calculation, if you drive a car like a Honda Civic, you’re paying $7.30 more than you should every time you fill up — to Wall Street speculators. If your car is a Ford Explorer you’re paying an extra $10.41. For a Ford F150, he says owners pay an additional $14.56 per fill up -or more than $750 a year. [ABC News, 2/23]
Looks like Republicans need to do their homework. The GOP has only exacerbated the problem to boost the profits of their special interests friends—protecting tax breaks for Big Oil, pushing for dramatic cuts to the Commodity Futures Trading Commission, the agency tasked with policing price manipulation in oil markets, and introducing legislation to overturn critical oversight in the Wall Street Reform and Consumer Protection Act.
Speaker Boehner ramping up his rhetoric won’t bring down gas prices. Cracking down on speculation will.