Republican presidential candidate Michelle Bachmann has pledged, if elected, that she would bring the price of gasoline in the U.S. to below $2.00 a gallon. In recent stops along her campaign trail, Bachmann has held fast to her pact, assuring that sub two-dollar gas would not just become an instant reality were she to be elected – Bachmann additionally stated that prices could be brought drastically down by increasing domestic oil production. According to presidential hopeful Bachmann, “We have more oil in three Western states in the form of shale oil than all the oil in Saudi Arabia.”
Disregarding pledges that lack qualitative backing, Congresswoman Bachmann’s promise is worth investigation into the question; can the president bring down the price of gasoline, and can such a price drop really be achieved through increased U.S. petroleum production?
In short, the answers are no and not for long. As one of the most sought after resources on earth, petroleum has its price determined on the global market, not by heads of state. The United States does not produce a majority of the world’s oil, and thus fluctuations in price are determined when the world oil market (influenced by larger producing nations such as Saudi Arabia and/or organizations such as OPEC) tightens inventories or produces additional supply.
Increasing domestic oil production could possibly reduce prices at the pump but only in the very short term, and would certainly present an economically and environmentally contentious issue. Many politicians (including Republican hopefuls Bachmann and Newt Gingrich) have proposed emptying the US’ Strategic Petroleum Reserve (SPR, currently measured at 727 million barrels) into the domestic market. Other strategies to lower the price of gasoline include opening the Arctic National Wildlife Refuge (ANWR), which holds approximately 7 billion gallons of oil. However, the U.S. currently uses about 20 million gallons a day, so crude flowing from the SPR or ANWR would be used up completely in a little over a month and in less than a year, respectively.
In short, Congresswoman Bachmann’s pledge is not grounded in reality, as her strategies would at best result in only short-term decreases in the price paid at the pump in America.
What campaign issues regarding gasoline policy have interested you? Please comment.