High Gas Prices Could Be Here for a While
At $3.99 a gallon, it was the most I have ever paid for gasoline and the low-light of my week. Some may argue that we Americans have gotten spoiled and that it is unrealistic for gas prices to remain below $2 a gallon forever. But that’s what the average gallon of gas cost just 2 years ago — $1.90. Since then, the price has slowly risen now averaging more than $3.50 in most parts of the country. So who or what is to blame and when will it end? For the answer to that, we need only look to basic economics and the law of supply and demand.
In the past 2 years, the United States government’s energy policy has been altered to restrict and even reduce domestic oil production. The Interior Department has canceled 77 leases for oil drilling in the western U.S. where, according to the U.S. Department of the Interior and the Bureau of Land Management, there are an estimate 800 billion barrels of recoverable oil shale — three times greater than the proven oil reserves of Saudi Arabia.
Last summer, the government instituted not one, but two drilling bans in the Gulf of Mexico, which is estimated to cut domestic offshore oil production by 13 percent this year. Last fall, the Interior Department announced that the Pacific and Atlantic coasts, where there it is conservatively estimated hold at least 19 billion barrels of oil, will be placed off limits to oil exploration for the next seven years.
Then there was the attempt to place a tax on carbon emissions which would have made it more expensive for industries to burn fossil fuels. The legislation failed, but it is clear that our government’s energy policy’s goal is to reduce the amount of fossil fuels produced in this country.
Some politicians and pundits have cited gas prices in Europe, particularly in Great Britain where a gallon of petrol averages close to $10, as reference that it’s alright if prices here in the U.S. rise to $5 or even $8 a gallon. Thomas Friedman, the award-winning journalist for the New York Times thinks we should even add taxes to the price if it begins to fall below $4 a gallon. Speaking on CBS’s Face The Nation last Sunday,
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