Gas Prices and Economic Principle

For several months now, Americans have been enjoying significantly lower gas prices, helping many middle-class Americans mitigate the burden of the ever-increasing costs of living as wages remain stagnant. Of course, the drops in gas prices has had absolutely nothing to do with the current administration’s policies; however, time and time again, Obama and his minions have pounced on this opportunity to assert false claims of influence – by hyping the fact that American oil production and distribution has, indeed, increased tremendously during his years as president; while conveniently omitting the fact oil and gas production in this country has spiked only in spite of the policies and stances held by his administration and democratic legislators.

That being said, the sad reality is many Americans continue to praise their beloved president for providing this much needed relief for their household budgets; completely ignorant of the fact oil and gas prices are almost entirely dependent on the basic economic principle of ‘supply & demand’. Every single instance where American oil companies and republican legislators have made attempts to influence American Oil independence, Obama and Democratic legislators have rendered these aspirations impotent.

First off, it must be made clear that the President of the United States, nor the legislative bodies, possess any truly meaningful legislative power over gas prices; let alone, the falling prices of oil barrels from the peak at $120 per barrel (translates to the $4+ we paid in the past) to the $60-70 per barrel we’re experiencing now – over which gazilionaires, politicians, and American oil execs seem to be the only people freaking out, while the rest of us pay less for gas than we have in 6 years or more… A much needed reprieve for average, middle class Americans who’ve no stake in the oil futures biz.

Politics play almost no role in gas prices, if someone tells you otherwise – they’re lying or uninformed/ignorant. OPEC (Organization of the petroleum exporting countries) is entirely responsible, much to the chagrin of many politicians, for the falling prices of oil and therefore gas prices.

Obama and his supporters will spew talking points like: “America is producing more oil and fossil fuels for energy than ever before, helping this country become less dependent on foreign oil, and fostering lower costs at the pump” or some nonsense along those lines.

Yes, we are producing more oil and energy from fossil fuels than ever before, but only in spite of the Obama Administration and house democrat policies and positions. Obama and democrats have repeatedly shot down proposals for drilling on public lands, or running a key pipeline; which will eventually do so much for economic growth and American oil independence

The vast majority of the 66% increase in American oil production has resulted from drilling, fracking, the shale boom, and new techniques such as horizontal drilling all attributed to American private entrepreneurs conducting exploration and recovery on PRIVATE land – hence, regardless of DC policy, private companies, private ambition and advancement in technology, and private land have served as the sole variables in increased American oil output. The federal government had NOTHING to do with the increase of oil output; if anything, it’s only stood in its way.

It must be understood that falling gas prices has had little to do with increased American oil output. At least, not for the reasons most would assume. We haven’t been so successful with oil production that suddenly gas prices have dropped over 1/3rd. We’ve been so successful with oil production that OPEC has taken notice and has subsequently been alarmed by the major threat to their long-term market share it has presented.

OPEC is why gas prices are tumbling and they’re not making any secret out of why. They’re actually absorbing about a $300 billion dollar per year budget shortfall for 2015-2017 and have declared their willingness to push prices down to as low as $20 per barrel. They’re ensuring this happens by opening the throttle on their pumps, increasing global oil supply far above demand in order to push down prices.

This is great news for us in the short term, enjoy it, but they’re doing this in an effort to stop the rapid growth of American oil and the threat it represents to their interests. They’re willing to take their medicine now in order to protect their market share for the long-term. They successfully endeavored for the same result in the 80’s when American oil was rapidly growing, which ultimately debilitated growth in American oil production for over a quarter century.

That’s what is going on with gas prices. Don’t thank Obama; don’t thank democrats; don’t thank the GOP; give a shout out to the Saudi’s if anything, but know they didn’t do this for you (obviously).

Meanwhile, the president is on a campaign to imply that he’s somehow responsible for gas prices:

“America is the No. 1 producer of oil, No. 1 producer of gas. It’s helping to save drivers $1.10 a gallon at the pump over this time last year.”
Remember when republicans campaigned on promises to drill more oil and provide more federal resources and land for oil and gas exploration? I distinctly remember Sarah Palin being viciously mocked by the liberal media for a speech in support of the GOP push in which she said “drill baby drill!” It became a rallying point for conservatives while liberals mocked her, painting her as having blatant disregard for the environment, green energy, and whatever other hippie bullshit liberals talk about over soy lattes and scones.

President Obama called the plan for drilling “a slogan, a gimmick, and a bumper sticker… not a strategy”.
He went on:

‘They were waving their three-point plans for $2-a-gallon gas’ Obama told a laughing audience during an energy speech in Washington. ‘You remember that? Drill, baby, drill. We were going through all that. And none of it was really going to do anything to solve the problem.’

‘Drill, baby, drill’ won’t lower gas prices today or tomorrow; but, it will fuel our addiction to fossil fuel.” – Rep. Janice Hahn, D-California.

They’re lying about American oil drilling having any economical correlation with gas prices; they’re lying about being responsible for increased drilling and output; they’re lying about this issue from every angle and using it to legitimize their stewardship – it’s all lies and conjecture. Don’t be a fool.

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