Who could have imagined the day would come when the Natural Resources Defense Council (NRDC) crafted a report focused on relieving Americans’ “pain at the pump”? 

But there it is: the same group that once stated “there’s nothing we can do to control the price of gas in America” released a paper this week outlining the ways in which Keystone XL pipeline is apparently poised to make prices at the pump go higher – as if higher gas prices were something the group actually opposed. 

Of course, we know the truth about NRDC’s position on gas prices – that they support policies that increase the cost of fossil fuels to discourage their use. What’s tougher, though, is determining how the group came up with a methodology allowing it to argue, in effect, that greater supply of secure sources of... more »

Back in February we ran the chart below. Then, at a congressional hearing last month, API President and CEO Jack Gerard referred to it in testimony urging lawmakers to consider the effects of increased U.S. oil production on global crude oil markets. We’ve written about the effects of increasing domestic supply here, here and here.

Last weekend the Washington Post took issue with the notion that the basic laws of supply and demand apply to crude oil like they do other globally traded commodities. The article noted Gerard’s congressional statements about supply and market expectations and dismissed them:

"As Gerard told it, 'the price of crude oil over three days dropped $15 a barrel and continued to move down.' The lesson, he said, was that 'markets are driven on a global basis... more »

Earlier this week, API hosted a conference call with bloggers to discuss rising gasoline prices and to correct misinformation about the factors that figure into the prices Americans pay at the pump. API Chief Economist John Felmy explained that crude oil costs account for 76 percent of the prices Americans pay for gasoline. Although crude oil is a global commodity, Felmy said that the United States is not powerless in dealing with global markets because, in fact, “we’re energy rich and have lots of options.”

In his opening statement, Felmy called for the United States to help put downward pressure on fuel price:

“America’s oil and natural gas companies believe a preemptive surrender to the global marketplace and world events is absolutely the wrong policy…Although the president re... more »

Let’s talk about a fundamental difference of opinion on the key energy issue of the day.

We say crude oil supply matters – in the context of global-market pricing, which affects fuel prices because the cost of crude accounts for 76 percent of what Americans are paying at the pump. More supply alters the energy equation, exerting downward pressure on crude prices. Energy Economics 101.

The president seems to disagree, saying there’s no “silver bullet,” while suggesting there’s not much that can be done to affect global markets and offer hope to beleaguered consumers. At the same time he tacitly acknowledges market forces work – but only from the side of the equation that reduces demand through efficiency and other measures.

We’re all for greater efficiency, but the president is igno... more »

U.S. Sen. Chuck Schumer is worried about the impact of the potential loss of Iranian oil on the global crude market. Reuters reports:

The United States should do more to encourage Saudi Arabia to boost its oil production to make up for lost Iranian oil, Senator Charles Schumer said on Sunday, urging renewed diplomacy as a way to ease the run-up in oil prices. … A public promise from Saudi Arabia, the world's top oil exporter, to pump oil at its full capacity would calm oil markets as well as gasoline prices, Schumer, the third-ranking Democrat in the Senate, said in a letter to Secretary of State Hillary Clinton.

Without saying so directly, Schumer’s point is that, yeah, supply matters. Global markets respond positively and negatively to ups and downs in supply – hence Schumer’s... more »