December 2, 2014

Why Gasoline Prices Are Down

American ingenuity has made the U.S. the world’s top producer

If you’re like most Americans, you haven’t been questioning the welcome drop in gasoline prices. You just fill ‘er up and feel grateful that you’re spending less.

Why has this remarkable drop come about? And what can we do to help keep prices lower?

Some of it, unfortunately, is beyond our control. Worldwide demand for oil is down now. That always causes the cost of gasoline to drop.

But the other side of the equation – the part that is under our control – has gone largely unheralded in many media accounts: the boom in U.S. energy production. Simply put, we’re producing much more energy domestically these days, and that is, predictably enough, pushing prices downward.

Since 2008, we’ve increased our domestic supply of oil by 50 percent. Thanks to technological breakthroughs such as hydraulic fracturing (“fracking”) and horizontal drilling, we’re able to find and extract far more oil than we possibly could have years ago.

Oil production in states such as North Dakota, Texas and Oklahoma has doubled in the last six years. The United States is now the world’s No. 1 producer of oil and natural gas. Signs that read “No to fracking” might as well read, “Yes to higher prices,” and “no” to the more than 100,000 jobs created in the oil and gas extraction industry over the last few years.

It all comes down to supply and demand. It’s pretty simple. We can’t do much about worldwide demand, but we can do a lot about supply.

Here’s what not to do: subsidize “green” energy such as wind and solar (or any form of energy, for that matter). If green forms of energy show promise, believe me, the market will put resources behind them. The fact that wind and solar producers are so wholly dependent on government handouts (i.e., taxpayer money) is telling.

Yet the push to prop them up continues. Consider the $440 billion tax package lawmakers recently hammered out. It contains a provision that would have revived the wind tax credit that expired last year. Yet the wind industry already gets $56 in federal tax credits per energy unit produced.

What should we do? Stop impeding markets. Here are four steps policymakers should take, courtesy of Heritage Foundation energy expert Nicolas Loris:

First, lift the ban on crude oil exports. A recent IHS study found that removing the ban would lower gasoline prices by 8 cents per gallon, saving drivers $265 billion over 15 years and adding nearly 1 million jobs by 2018.

Second, lift the drilling bans and approve the Keystone XL oil pipeline. We need more exploration in the eastern Gulf of Mexico, and along the Atlantic and Pacific coasts. We should also be conducting more lease sales off Alaska’s coasts. Alaska’s Arctic National Wildlife Refuge is another abundant source of oil, with an estimated 10.4 billion barrels of oil resting beneath a few thousand acres.

Third, repeal the ethanol mandate. This rule forces refineries to blend increasing amounts of ethanol into gasoline each year, reaching 36 billion gallons in 2022. It’s already driven up fuel and food prices, according to multiple federal-agency and government-backed studies.

Fourth, prohibit greenhouse gas regulations. The Department of the Interior has already suspended oil and gas leases because of their alleged impact on climate change. Coming greenhouse gas regulations from the Environmental Protection Agency will increase the cost of energy production – and producers will pass those costs on to consumers. Yet the regulations will have no meaningful impact on the climate, the EPA has acknowledged.

Notice the one thing these steps have in common? It’s government getting out of the way. The secret to extending the streak of lower energy prices, it turns out, is no secret at all: Let markets work.

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!


The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2024 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.