Explains the fundamentals of gas prices, why they have remained so high, and how to bring prices down dramatically
WASHINGTON- In order to address the issue of rising gas prices, today the Institute for Energy Research launched a special Gas Prices webpage that explains the fundamentals of gas prices, why they have remained so high, and how to bring prices down dramatically.With gas prices still at a sky-high average of $3.84, Americans are getting squeezed at the pump. But the pain doesn’t just stop at the gas station – rising energy costs affect the price of almost everything that we buy. If this challenge is not properly addressed, the American economy will remain at risk of another job-killing recession.
Fortunately, our nation holds the key to solving this challenge. According to the Congressional Research Service, America is home to the largest fossil fuel resource base in the world. With such vast domestic energy resources, we have the ability to immediately decrease the price of oil and, consequently, the price of gasoline.
In order to lower prices at the pump, Washington needs to do only one thing: get out of the way. America’s oil and gas resource are being held hostage by Washington. As a result, billions of barrels of oil currently lay idle while increasing global demand is causing oil prices to rise.
“Markets respond to future expectations,” said Thomas Pyle, president of the Institute for Energy Research. “In 2008, the price of oil dropped over $9 per barrel as President Bush announced the end of the executive moratorium on drilling in the Outer Continental Shelf. The price dropped again after Congress reluctantly let their moratorium expire. If Washington makes a real commitment to increasing access to America’s 155 billion barrels of oil, the price would respond even more dramatically than in 2008.”
“The United States is the third largest producer of oil in the world, yet our domestic production is set to flat line as the developing nations of the world are demanding more and more oil to fuel their growing economy. Our only hope for remaining competitive in the global marketplace is to increase production of domestic energy so that we rely less and less on state-owned energy companies from unstable foreign regimes,” said Pyle.
Check out IER’s Gas Page to learn more about what’s driving high gas prices and how we can solve this problem.
