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Oil policy by sound bite?

Most of us would love a solution to high gas prices and are frustrated that we don’t see a fix. I’m even more frustrated by recently proposed policies that claim to help us out. These policies are thrown at us as sound bites, with no analysis of how they’d achieve their claims.

Offshore drilling? First, it takes years to come on line. Second, the oil companies would charge the market rate for their oil, which doesn’t help gas prices at all. Third, the increase in world oil production would be small, having little effect on oil prices.

Gas tax holiday? Experts in the field laugh: First, the savings you and I would supposedly get are trivial – on the order of one tank of gas over the summer. Second, the amount of gas to be produced this summer is already fixed. Third, a reduced price will create more demand for a fixed supply, which will then result in higher prices. Thus we will continue to pay high prices and the tax money we were providing for highway work will instead become oil company profit.



Richard Treiber

Penn Valley


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