From my article in today's Washington Examiner, "Gas prices are complex, but not mysterious":
Simply put, oil supplies matter. Larger
supplies of secure oil -- oil that won't be withheld from the market for
political reasons -- can result in lower retail gas prices at the pump.
The importance of secure oil cannot be
overstated. It's quite likely that oil and gasoline prices would decline
over the long term if more oil were produced domestically and Canadian
oil were allowed to flow freely through the rejected Keystone XL
pipeline. In fact, just imagine how different the U.S. economy and the
energy situation would be today if, 30 years ago, our elected officials
had allowed drilling in the oil-rich areas of Alaska, along the West
Coast, the East Coast and in the eastern Gulf of Mexico. Instead, they
chose to block access to those supplies, keeping us dependent on foreign
oil from politically unstable countries.
Our economy runs on oil, and DOE forecasts
suggest that oil will be the "fuel of the future" and continue to play
an important role in our energy mix for decades to come. It's time to
embrace the facts about oil and discard the "fuel of the past"
mentality. There is nothing that provides as much energy bang for the
buck as oil. Basic economics tell us that if we had more of it, our
bucks would go a lot further.