Traverse City Record-Eagle

Archive: Saturday

March 24, 2012

Another view: Don't buy lies about gas prices

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Candidate Barack Obama said it, and now his opponents are saying it. Elect them and gas prices will be lower.

Nothing could be further from the truth.

A recent in-depth analysis by a variety of economists and the Associated Press shows policies like more domestic U.S. drilling leading to lower gas prices are beyond completely false.

It's worse, because these statements are completely false and some political leaders continue to mislead and insist they are true.

The AP analysis showed: For the last 36 years, there has been no correlation between U.S. drilling and gas prices.

In fact, often times when drilling went up, so too did gas prices, and there were times when drilling went way down and so too did gas prices.

Four economists versed in statistical correlation came to the same conclusion from the data AP studied from the U.S. Department of Energy. Two investment houses interviewed by AP said the same thing.

"Drill, baby, drill has nothing to do with it," said Judith Dwarkin, chief energy economist at ITG investment research.

The facts suggest almost an opposite correlation between U.S. domestic drilling and gas prices.

In the past three years, U.S. oil companies have increased production by 15 percent while prices went from $2.07 per gallon to $3.58 per gallon, according to the AP research on prices reported by the federal government, which gets them from the industry.

Again, U.S. oil production, according to the analysis, is now at the same level as March 2003 when gas cost $2.10 per gallon.

The study shows there is not even a long-term correlation between increased drilling and gas prices.

Oil production dropped steadily from 1986 until about three years ago, and the analysis shows gas prices were around $2 a gallon for most of the 1980s and 1990s. ...

Let's hope candidates for office study the energy economics and take some integrity pills at the same time.

Both current candidates for president and the president himself used bogus claims about how political leaders could impact gas prices, today and four years ago.

Don't believe them. Facts suggest otherwise.

The Free Press, Mankato, Minn.

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