Opponents of increased domestic production of oil and natural gas like to point out that oil is a world-wide market – which it is – then immediately try to support their case by looking only at U.S. production.  These folks jumped on an AP report this week that sought to prove that U.S. production has no bearing on prices.  Here’s the key paragraph:

"Politicians can’t do much to affect gasoline prices the market for oil is global. Allowing increased drilling in the U.S. would contribute only small amounts of oil to world supply, not nearly enough to affect prices. The Associated Press conducted a statistical analysis of 36 years of monthly inflation-adjusted gasoline prices and U.S. domestic oil production and found no statistical correlation between oil that comes out of U.S. wells... more »

Today API released the following statement on oil sands development:

With the approval of federal and state regulators, the Trans-Alaska Pipeline (TAPS) has been restarted at a reduced rate of flow. Rather than transporting about 640,000 barrels of oil a day from Prudhoe Bay to the port at Valdez, Alaska, the pipeline is moving about 400,000 barrels per day. At Valdez, the oil flows into storage tanks for loading onto tankers bound for West Coast refineries.

Although the secondary pipe in the basement of Pump Station 1 continues to leak and the new bypass piping has not been completed, government and Alyeska Pipeline Service Co. officials agreed that operations along the massive, 800-mile pipeline should be resumed. By turning on the pumps along the pipeline's route, the oil in the pipeline is warmed and concerns about icing can be addressed. At Prudhoe Bay... more »

Oil prices on the global marketplace rose by $1.86 cents a barrel, or more than 2 percent, yesterday after the presidential oil spill commission recommended more government action to improve safety in the Gulf of Mexico. According to published reports, the commission's conclusions raised fears that the government might slow oil production from its already depressed levels.

Other factors also could have had an impact on the price yesterday. Foul weather along the East Coast, the closure of the Trans-Alaska Pipeline, and the government's latest crude oil demand and price predictions could have added to the upward pressure on the price, which closed at $91.11 yesterday on the New York Mercantile Exchange.

By and large, the fundamentals of supply and demand are the most important influences i... more »

For the past couple of years, U.S. policymakers have been debating two different ways of addressing this country's energy needs. Some politicians believe the United States should embrace the development of alternative energy resources, including wind, solar and biofuels. Others say America should focus on domestic fossil fuels because alternative energy sources are not as affordable or efficient as coal, oil and natural gas.

Which approach is the best course of action?

Marc D. Weidenmier of the American Enterprise Institute for Public Policy Research examines this question in a new study. He asserts that the recent clamor for alternative energy has been driven by record-setting crude oil prices in the summer of 2008, and he analyzes the impact of oil price spikes on the U.S. economy. Weide... more »