What’s the Drill? Obama Tells All!
Amidst public chagrin about gas prices, President Barack Obama is increasing U.S. oil production by augmenting existing leases in the Gulf of Mexico as well as off Alaska’s coast and holding more lease sales in a federal petroleum reserve in Alaska more often.
Obama said the measures “make good sense” and will help reduce national consumption of imported oil in the long term. Though he acknowledged this won’t help to bring down gasoline prices.
Analyst for Raymond James, Pavel Molchanov said:
“There is practically nothing that Washington can do that would materially change the price of fuel in this country…Given that imbalance, there is simply no policy shift that could plausibly come from the federal government that can significantly change that dynamic.”
Obama’s announcement came after House passage of three bills, including two this week which would speed and expand offshore gas and oil drilling. Those on the right of the aisle say the bills are aimed at easing gasoline costs, however, they too admit there will be latency to the arrival of the benefits.
Molchanov said:
“Even if all that works out, it still would not materially change global oil supply, and therefore would not materially change fuel prices in this country or any other…In the grand scheme of things, none of this changes the reality of $4 gasoline at the pump.”
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