Zakaria on Gingrich and Oil Prices
Via CNN, Fareed Zakaria:
Look, the world consumes about 80 million barrels of oil a day. The total U.S. increase in production, if you were to do everything that Newt Gingrich fantasizes about, would be less than half a percent of that. So the chance that it would have any impact on the price of oil, particularly in the short run, is pure fantasy. Newt surely knows better.
The truth of the matter is that we are in the middle of a great boom in domestic oil production. We are at the highest levels in 30 years. The United States for the first time is actually exporting oil rather than importing oil, and it has made no difference to our prices. In fact, as we can see, oil prices have gone up. Why? Because, (A) China is growing, India is growing, etc. and (B) people are worried about a possible war with Iran – geopolitical concerns. So these are not things that you can easily fix. You’re not going to get China to slow down. You are not going to change the fact that there are genuine concerns about Iran. Increasing American domestic production is such a marginal issue at this point that it’s really totally irresponsible for Newt Gingrich to be saying this.
Indeed. In fact, indeed3.
Another key point:
In point of fact, whether or not the president is enthusiastic about it or whether what’s happening is over his grudging objections, the truth of the matter is, we are in the midst of a huge oil boom and still prices are rising.
This is really rather significant: the entire argument about increasing domestic oil production is that it will allegedly bring down price. However, we have increased domestic production and yet price is rising. This is why just drilling is not the answer people like Gingrich make it out to be.
Keystone is a total red herring because, of course, the Keystone oil is going to be excavated, it is going to be produced, it is going to be used. It is going to be used by China or us. It makes not a jot of difference to the price of oil because that oil will reach the world market.
And I will conclude that, like Zakaria, I have no problem with increasing domestic production as a general proposition. However, I also have to accept the reality of the dynamic at work here (something Gingrich and, it would seem, the other GOP candidates are refusing to do).