But they’re pretty powerful.
On each side, Left and Right, those words elicit emotion. On one, it brings to mind an independence. On an ability to depend on one’s self for the requisite needs.
On the other, it brings to mind ugly environmental dangers, global warming and corporate greed.
But the biggest argument against increasing our domestic output of oil is that it simply won’t impact the price of a gallon of gas. The incremental gains that we would see will take years to realize. And even then they won’t amount to any meaningful impact on the global supply of oil.
I have a thought experiment.
If the addition of oil to the market won’t lower the price, then the reduction of oil to the market shouldn’t raise the price.
Consider Libya. As chaos began to set in, the price of oil surged:
NEW YORK — Oil prices soared to the highest level in more than two years as Libyan leader Moammar Gadhafi urged his supporters to attack protesters who are violently challenging his 42-year rule.
Libya holds the most oil reserves in Africa …
February 18, 2011 saw the price of oil at $86.20 a barrel. By March 4th, it was at $104.42.
In two weeks, oil jumped nearly 20 bucks. That’s NEARLY 25% because the world was scared Libya’s oil would stop flowing.
How much, exactly, does Libya produce?
1,790,000 barrels a day.
That is a lot of oil. But, relative, how much is that?
Libya represents just 2.9% of the top 18 oil producers in the world.
In other words, not much AT ALL.
Yet, the fact that we may, MAY, lose ALL -and no one thought we would-sent oil futures up.
If the thought of losing a fraction of 3% would send oil UP, why wouldn’t the thought of ADDING that same amount send oil down?