Keith Hennessey with a reminder:

"If (when?) battery technology leaps forward to make hybrid or electric vehicles a significant share of the market, then electricity and its sources will begin to act as significant substitutes for gasoline and diesel fuel. At that point R&D to reduce the cost of solar power, wind power, nuclear power, hydro power, and natural gas power could start to affect the price at the pump enough for you to notice. But until then fuel and electric power are for all practical purposes separate issues, and when an elected official’s response to high fuel prices is more research on or subsidies for some form of electric power production, he is either confused or misleading you. More from the EIA here.

But until then fuel and electric power are for all practic... more »

The New York Times reports Americans' attitudes toward offshore oil and natural gas development has been generally supportive the past couple of years. What a contrast with the shifts in drilling policy from the administration in Washington!

No surprise the public feels this way. Americans get the basic economics of gasoline prices - that is, the link between the cost of crude oil and prices at the gas pump. Developing domestic energy supplies simply makes sense.

The Times reports:

• A Gallup poll taken immediately after the Macondo accident last year showed 50 percent of Americans still supported offshore drilling, while 46 percent opposed. Less than a year later, in March, the public's drilling support had risen to 60 percent, with 37 percent opposed..
• Public support for offshore drilling... more »

What's up with U.S. gasoline prices? Or maybe we should say what's down?

The Energy Information Administration (EIA) reports the average price for regular gasoline has declined the past couple of weeks to $3.85 per gallon, down from $4 at the beginning of the month - a twist since the Memorial Day weekend historically marks the start of the summer driving season, higher fuel demand and rising prices.

The reason? Simple supply-and-demand economics, says API Chief Economist John Felmy, who briefed reporters on crude oil and gasoline price fluctuations this week.

Start with the price of crude oil, which accounts for 68 percent of the cost of gasoline. Crude prices reached $113 a barrel, reflecting demand from recovering global economies. Gasoline prices rose with them. "It's a function of the... more »

OK, which is it? First, Democrats said raising taxes on the oil and natural gas industry would do something about rising gasoline prices. Then they said it wouldn't. On Tuesday, Senate Majority Leader Harry Reid said both, almost in the same breath.

Talking on the Senate floor about a vote on a proposal to end standard business tax deductions just for the largest oil and natural gas companies, Reid said it "wouldn't affect gas prices at all." Then Reid did a 180: "We have to do something about exorbitant gas prices, and the best way to start with that is to do something about the five big oil companies getting subsidies they don't need."

Reid's issue spiel amused top Senate Republican Mitch McConnell. "Is it just me," he asked, "or is their message on their bill incredibly contradictory?"

Even as the economy creates more jobs, unemployment remains much too high. That is one reason Americans remain highly suspicious of efforts to increase taxes on the oil and natural gas industry, an industry that supports more than 9.2 million jobs - and could create more than one million new jobs if we opened areas currently off limits, pursued oil and natural gas shale development, and furthered our energy partnership with Canada. A new study by PricewaterhouseCoopers LLP found that in addition to millions of jobs, the oil and natural gas industry also supports 7.7 percent of the U.S. economy, with its economic impact reaching all 50 states and the District of Columbia.

Yet, some in Congress are calling for higher taxes on U.S. energy companies. These lawmakers are working under the guise... more »