Why do some of you think that our drilling and refining our own crude will raise prices???

Question

exactly why do some of you folks insist that drilling our own oil and refining it is going to make prices for gas rise?

you need to remember the law of supply and demand. america's demand for oil products is high. the middle eastern countries are withholding much of their daily production of oil to drive the prices up, because the demand is so high.

if we drill and refine our own oil--enough in AL and offshore around this continental shelf to last the usa for the next 200 years while we struggle to produce alternative energy sources that actually work and do not cost more (energy wise) to

make--we then are adding our oil to that which is produced and exported from middle eastern countries.

therefore, there is more supply. the demand stays the same, but more supply lowers the prices.

so why do some of you think that gas and heating oil is going to go up in price rather than come down?

Answer 1

I haven't seen anyone suggesting that drilling and refining US crude will raise prices in the US.  I'm not saying that someone hasn't said it, just that I haven't seen anyone say this, and I've been reading quite a bit about this subject, and I also work in the oil business.  So if someone did say it, they are a rarity.

I'm curious, though, where you get the idea that there is "enough oil in Al[aska] and offshore around this continental shelf to last the usa for the next 200 years?"  The US is currently consuming almost 21 million barrels of oil a day (see first link).  To keep America running for 200 years at that rate of consumption, there would have to be 1.5 TRILLION barrels of oil in the areas you mention.  That is more than the proven reserves for the entire world (see second link).

I suspect you have gotten your "enough oil for 200 years idea" from the Lindsey Williams video that is making the rounds of the Internet, or from somebody talking about the Williams video.  If so, let me tell you that Williams is a crank.  For instance, in the video (just do a search on "Lindsey Williams" and you'll find it) Williams makes the claim that on March 18, 2005, on the Bill Maher show, the governor of Alaska made a claim similar to the one you are making, only he said, supposedly, that there was enough oil under the North Slope of Alaska alone to keep the US running for 200 years.  Well, if you check out that episode, as I did, you will find that at no time during that broadcast does the governor make any such statement (see third link).  The closest he comes is in saying that, if there's as much oil in the Alaska National Wildlife Refuge as some people think, it would be equal to what the US gets from Saudi Arabia over 25 years.  The US gets about 20% of its oil from Saudi Arabia.

In sum, then, your claim that people are saying that drilling and refining US domestic crude would actually raise prices is not supported by anything that I have seen, and your claim that there is enough oil in and around the US to last for 200 years is . . . well, to call it ludicrous seems almost too kind.

Answer 2

Market demands have nothing to do with gas prices, any fool knows that.

The oil companies always have a reason to raise prices.  Off shore drilling has a couple of major problems other than the hazards it creates. For example, the equipment to do it does not exist in the U.S. any more, nor do the facilities to build it. Ever hear about all the jobs being moved over seas to up profits? Guess what! The return from off-shore oil would not pay for getting it even at today's prices.

Anwr oil is easier to get to, and could be brought on line in 8 to 10 years, but is a limited deposit. The rich oil fields that are yet to be drilled have been under the control of the oil companies for years.  They choose not to drill, it is an investment (even though we own the land).

If the availability of domestic crude were to increase, the oil companies would claim that there is a shortage of refineries (and many of them are in poor condition due to lack of maintenance).