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With So Much U.S. Oil, Why Is Gas $3.70?

June 29, 2014

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This July 4, the price of gasoline in the US is expected to be at its highest level in six years - at $3.704 per gallon according to the Energy Information Commission.

Separately, this week, the Obama Administration lifted a 40-year-old ban on the exporting of crude oil. Steve Mufson of The Washington Post noted, “The Commerce ruling initially clears the way for as little as 20,000 barrels a day of new condensate exports (minimally processed super-light oil) but that could rise to as much as 200,000 barrels a day, the estimated Gulf coast capacity of stabilization units, according to an analyst report by Citigroup.”

While there is a debate on the left and right as to what this means, one thing is clear – increasing U.S. oil production will not increase your standard of living if you live in the U.S., and will not lower energy costs in nations around the world.

If we have so much oil in the U.S., why hasn’t the price gone down at the pump giving everyone a raise?

Separately, in President Obama’s State of The Union Address in January, he credited part of the U.S.’s success in energy to natural gas.

He stated, "The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.

"I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good."

An “All-of-The-Above Energy Strategy” is no energy strategy. After all the rhetoric and today’s high gasoline prices, why is everyone always asking for more research? We are on a continued plan of more oil, and no natural gas.Let me ask you this, if you bought a natural gas car, where would you fill it up?

The Honda Civic GX first appeared in 1998 as a factory-modified Civic LX that had been designed to run exclusively on compressed natural gas. How is the government helping by building that infrastructure it promised? The answer is that it is not.So, when it comes to vehicles, the excitement around natural gas is all lip service.

I have written that what we need is a plan, industry coordination, finance securitization, and to actualize the notion that clean energy access is the number-one thing we can export to lift millions out of poverty. America has already invested in the research and development needed to show the world how to democratize energy. What we lack is the conviction to actually deploy it.

So, instead we are “plan free,” exporting oil and perpetuating a long-term strategy that is no strategy.In the meantime, we are paying $3.70 at the pump – 3X more than prices in 1999.

Those driving a Nissan Leaf or Tesla, for example, pay little for filling up. And, buying a natural gas car makes no sense, because you can’t fill it up.“All of the above” ensures chaos, but the Government has a responsibility to ensure that even in “chaos” we are headed in the right direction.

I am looking forward to writing the headline that says, “The World finally declares war against $100 oil,” because a tripling of oil prices since 1999 is the main reason we feel so poor.

In the meantime, oil exports from the U.S. has zero meaning to your pocketbook – no matter where you live.

Photo: Heather A. Craig/Shutterstock.com

Nebrios wrote:Makes me wonder if the falling prices will stay and a mileage tax imposed for infrastructure...

E_ wrote:Why its over gallon anyway thus they get.more $ the more gas is sold.