With gasoline in this region persisting at $4 and up, the inevitable complaint is raised that motorists are being gouged by greedy oil companies. Motorists are being gouged. But the culprits are in Washington, where energy policies intentionally restrict oil
With gasoline in this region persisting at $4 and up, the inevitable complaint is raised that motorists are being gouged by greedy oil companies. Motorists are being gouged. But the culprits are in Washington, where energy policies intentionally restrict oil supply.
The more of something that is sold, the lower its price. Conversely, when supply is reduced, prices tend to increase.
A new report from none other than the government confirms the gouging motorists are experiencing is thanks to the government.
A small portion of the United States is capable of out-producing all the rest of the world’s oil-producers, says the Government Accountability Office.
The GAO says there is oil equal to four times Saudi Arabia’s proven resources just in the Green River Formation in Wyoming, Utah and Colorado. At today’s U.S. daily consumption rate of 19.5 million barrels, the Green River reserves could supply domestic demand for 200 years.
For two centuries, not another drop of imported oil would be required. And that also means enough could be produced to more than meet demand, which would reduce prices at the pump.
Why, then, are motorists being gouged? The Obama administration contends the U.S. contains only 2 percent of the world’s proven reserves. Apparently, President Barack Obama has not inquired of his GAO, or of the U.S. Geological Survey, which estimates the Green River Formation to contain about 3 trillion barrels of oil.
Why hasn’t this oil been pumped? The Bureau of Land Management, EPA and the president are determined to prevent that as part of their crusade to force America to adopt more-costly, less-efficient alternative energy. Seventy-two percent of Green River Formation’s oil is beneath federal lands, where the government restricts drilling. Moreover, 94 percent of federal onshore and 97 percent of federal offshore lands are off limits to drilling. The administration recently rescinded 77 oil and gas leases in Utah, alone.
Restricting supply isn’t the government’s only means of gouging. A Louisiana State University analysis says the Federal Reserve’s commitment to near-zero interest rates also drives gasoline prices higher. “While the White House has backed the Fed’s pursuance of soft monetary policy, it has allowed three years to pass without creating multifaceted energy policy,” says LSU economist Joseph R. Mason. “And consumers are being hit with this one-two punch at the gas pump.”
