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Friday, May 20, 2005
 
Sip's Misc.

All supply and demand. It's a good question. Increased domestic supply may not necessarily reduce the price of gas, but it can help stabilize it going forward. Global demand is currently outpacing supply and will be for the next twenty years. But increased domestic supply means dedicated and reliable sources of an important raw material. Consider what we term "energy security" - by producing more oil and gas domestically, there are less variables to disrupt the supply ie. unstable foreign governments, weather, transportation factors, collusion etc. and you have shorter routes from source to refinery then to marketplace which also cuts down on cost.


Comments:
So if we hit it big in Alaska, and like billions of gallons of domestic crude is sent to the refineries, it won't be any cheaper?
I understand that it would make it harder for a foriegn power to disrupt us by limiting supply(see the Carter Administration), but c'mon, were Americans..can't we find a way to "make" it cheaper.
This one might be tough to talk me down from, as I still can't understand why Iraq is not funding its own progression twords freedom with there oil...so I'm from that school of thought.
 
Ok - to reiterate and clarify...increased domestic supply will STABILIZE prices going forward. If there is enough increase in domestic supply ie. ANWR + Rockies + Gulf of Mexico near FL + offshore VA NC SC GA + more offshore CA + others areas like Great Lakes and TIBS backyard, the prices will definitely come down. There is no silver bullet to reducing price - too many ingredients to the soup. New technology helps on the supply and demand sides. Tech helps us find more supply and improves the costs for exploration and production. Tech has also helped with efficiencies and conservation. But those gains over the last thirty years have been offset by an ever growing, energy hungry economy. Reducing tremendous red tape and over burdensome regulations could also help improve supply and help refineries increase their volumes as well.

Again, no silver bullet, but any of these steps would help toward stabilizing and possibly reduce costs.
 
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