June 11, 2008

Eat Here and Get Gas: Blunt Talk On Gasoline Prices

Hatched by Dafydd

John Hinderaker at my favorite blog has a thought-provoking post up:

Republican whip Roy Blunt put together this chart showing the practical effects of Democratic vs. Republican policies on the price of gasoline at the pump...

Here is the accompanying graphic:

Gas price chart

Blunt's gas price chart (under Democratic and Republican policies)

Rep. Roy Blunt (R-MO, 96%) appends the method he used to arrive at these figures:

Methodology: Retail gasoline prices are the result of literally hundreds of factors including crude oil supply, global demand, refinery capacity, regulation, taxes, weather, the value of the dollar, etc. Therefore it is impossible to say with certainty what one individual action will do to the overall price. However, based on what we know about the impact of crude oil supply and prices it is possible to develop some potential ranges of impact on gasoline prices for certain policy changes. For example, using the methodology employed by Speaker Pelosi and House Democrats that suspending shipments into the Strategic Petroleum Reserve (between 40-77,000 barrels of oil a day) would reduce gas prices by at least 5 cents, bringing ANWR online (at least one million barrels of oil a day) could impact gasoline prices by between 70 cents and $1.60.

Blunt is correct; if you use the minimum of each of the ranges in the chart above, you do indeed get a reduction in gasoline prices of $1.98 per gallon, dropping the price of (regular, unleaded) gasoline down to $2.06.

But here is the coolest part... if you use the maximum savings instead, then implementing all the energy-producing measures that the GOP wants would mean that the oil companies will end up paying us 74¢ per gallon to accept the gas! Yes sir, the cost savings would be $4.78 per gallon, dropping the cost of a gallon of (regular, unleaded) down to <$0.74> -- that's negative seventy-four cents.

Let's all bloat up with free gas!

Seriously, I'm sure the Republican measures would drop the cost of gasoline markedly; among other effects not factored in here, it would cause the world oil market price to drop, as global supply would significantly increase... and it would allow us to compete with Saudi Arabia, Iran, and Venezuela to sell oil to China and India.

The price would assuredly plummet; I'm just not prepared to argue that it would drop the price below zero.

Hatched by Dafydd on this day, June 11, 2008, at the time of 1:30 AM

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» Follow The Money from Wizbang
Well, Cassy did a pretty good job covering Barack Obama's statement that he would have "preferred' had the price of gas gone up gradually, and not shot up like it... [Read More]

Tracked on June 13, 2008 8:13 AM


The following hissed in response by: oarmaswalker

It also makes sense on this plane:

Price of Gas before Aunt Nancy and Uncle Reid took over congress: $2.11

Price now: $4.04.

This means the producers EXPECTED the administration and Congress to reach an accord BEFORE the Democrats took over. How do you feel about the lost 38 seats in Congress [and 7 senate seats] in 2006 now America? Go Greenpeace, Go Soros, you can bring America's income down to the level of a third world country and make some of us feel good about it.

The above hissed in response by: oarmaswalker [TypeKey Profile Page] at June 11, 2008 7:10 AM

The following hissed in response by: BarbaraS

To stop putting oil into the SPR is totally stupid. This reserve is for emergencies and what if the Saudis and others refuse to sell us oil in order to blackmail us into doing their will? We would have to cave under those circumstances. This is the primary reason we should be drilling ourselves.

I disagree with Blunt's graph of the cost of windfall taxes on the oil companies. It would be a whole lot more than he states. Oil companies would just pass this cost onto the consumer just like all busniesses do.

The above hissed in response by: BarbaraS [TypeKey Profile Page] at June 11, 2008 11:36 AM

The following hissed in response by: cdquarles

@ BarbaraS,

That's just the beginning. Oil windfall profits taxes from the 70s, banning exploration and development of reserves on Federal land and offshore regions (see the NO map) from the early 80s (a Carter policy that began in 1981 IIRC), excessively stringent new source rules killing refinery construction (helped shutter thousands of older, smaller refineries and encouraged the expansion of larger ones in NJ, AL, MS, OK, LA, and TX, IIRC) greatly contributed to the US falling from the No. 1 oil and gas producer in the mid 70's to No. 3 today.

There are enough known and potential reserves in and near US territory that we could double our production to 10M bbl oil and 6M bbl oil equivalent gas per day and still have enough to last nearly 70 years. Add in more nuke plants and in-situ Fischer-Tropsch coal liquid/synthesis gas production and then we could limit our imports to Western Hemisphere sources.

We already pump methane out of landfills and coal fields [and we haven't begun to tap the methane hydrate clathrates that outgas every day] ;).

The above hissed in response by: cdquarles [TypeKey Profile Page] at June 11, 2008 10:02 PM

The following hissed in response by: Navyvet

This reminds me of the old joke (circa 1974), where a man changed to spark plugs that improved gas mileage 20%, installed a new fuel injection system that added 30% to mileage, used a fuel additive the improved mileage by 25%, and switched to a new synthetic oil that increased mileage by 27%. He drove his car around the block and the gas tank overflowed.

The above hissed in response by: Navyvet [TypeKey Profile Page] at June 12, 2008 1:59 PM

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