Monday, April 2, 2012

One Solution For High Gas Prices

It is common knowledge that “there is no quick fix” for high gas prices. It’s going to be a long-term effort to reduce our reliance on oil and we’re probably in for higher prices no matter what we do in the short term or long term because we’re facing a number of macro trends, such as systemic tightness in global supplies (peak oil), ongoing international tensions with Iran, etc., and perhaps also some amount of speculation in oil prices.

But is it really true that we can’t do anything to bring down gas prices in the short term? Maybe not. There are in fact a number of policies that could have a rapid impact on demand and possibly even bring down gas prices dramatically.
One policy, in particular — banning U.S. exports of gasoline — could result in significantly lower prices for gasoline almost overnight. As far as I can tell, this policy is not being talked about at all, and it should be.

The United States became a net oil-product exporter in February 2011 for the first time since 1949. It’s important to stress, however, that “net oil products” refers to refined oil products, not to crude oil itself, which dwarfs net oil products. We still import about half of the liquid fuels we consume each year and, as I wrote recently, we only produce about 6 million barrels of crude oil per day and we consume about 19 million barrels of all liquid fuels (including biofuels and natural gas liquids, etc.).

Read the rest here.

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