If a picture is worth a thousand words, the graph below speaks volumes about the price of gasoline. It illustrates how much gasoline's pump price has fallen in various regions of the country since gasoline reached a record high in July 2008.

Note: Image updated 10/08/2009

According to the Department of Energy's Energy Information Administration (EIA), the average U.S. retail price for all grades of gasoline fell $3.13 cents a gallon from the prior week, to $2.523 a gallon. The average price for regular grade gasoline finished the week ending October 5 at $2.468 a gallon.

Gasoline prices historically have tracked crude oil prices, which are determined on the global crude oil markets. Last year, high worldwide demand for oil relative to supply pushed oil prices up. Then as prices rose, dema... more »

This week's episode focuses on a recent tour of the THUMS Islands, a group of four manmade islands in California's Long Beach Harbor, where oil and natural gas are produced. The episode also features sound bites from Frank Komin, president of Occidental Petroleum, and Charlie Plant, production manager of White Island.

Use the audio player below to listen to the recap and follow along with the show notes. I hope you find the podcast informative.

Show Notes:

00:20 The THUMS Islands are four manmade islands in California's Long Beach Harbor where oil and natural gas have been produced for the past 40 years.

01:00 The discovery of oil in the Long Beach area set off a drilling boom that threatened to turn the coastline into an industrial zone, so city voters passed an initiative to tap... more »

The U.S. Supreme Court today declined to consider an extremely important Fifth Circuit decision on royalty relief. This adds finality to the Fifth Circuit's unanimous decision that Congress, when it passed the Deepwater Royalty Relief Act, provided royalty relief based on volume, not price.

The Deepwater Royalty Relief Act was passed in 1995 when crude oil prices were low by historical standards ($18.40 average for the 1995 calendar year) as a means to increase U.S. oil production. To make deepwater drilling more attractive to investors, Congress authorized the MMS to waive or reduce the amount of money paid to the federal government on the initial volumes from oil-producing leases issued between late 1995 and late 2000. On the leases sold in 1996, 1997 and 2000, MMS specified royalty reli... more »

Thank you to my friend and fellow blogger James for allowing us to feature his commentary here. This was originally posted at his own blog, Observations.

Our government still has not figured out what to do about the dependence on foreign oil that everybody agrees is an unacceptable situation.

The sensible thing to do, of course, is to produce more oil and natural gas from sources within the United States and off the coasts, and the sooner, the better. "Drill here, drill now" is not just a slogan; it's a prescription for energy independence.

The 30-year old ban on offshore drilling along the Atlantic and Pacific coasts expired a year ago, and yet the federal government has sat on its hands, allowing time to pass without moving to reduce the need to buy oil from countries that are unfriendly... more »

One year ago, the 30-year old ban on offshore drilling along the Atlantic and Pacific coasts expired, opening the opportunity for the United States to drill for more of its own oil and natural gas. What has happened since then to make America more energy self-sufficient?

Nothing.

The wheels of government continued to turn, of course, and the debate over offshore drilling made occasional headlines. A Five-Year Leasing Plan was issued by the Bush Administration, but was put on hold by the Obama Administration. Hearings were held in several states. A court ruling effectively delayed some Alaskan plans for oil and natural gas until the government has reassessed environmental effects. A Senate committee approved a proposal to permit drilling in the eastern Gulf of Mexico and since the ban expir... more »