Whenever gas prices spike, calls mount to increase oil production in the United States. Then experts point out that this won’t make a dent in gasoline prices. And politicians ignore them and keep calling for more oil drilling. Today President Obama at least partly went along with these calls by announcing plans to expand drilling in Alaska, and speed new exploration offshore.
There may be good reasons to increase oil production in the United States–such as increasing high paying jobs, increasing the revenues of oil companies, and reducing the U.S. trade imbalance—but driving down gas prices isn’t one of them. Increasing drilling won’t decrease gas prices much for several reasons. The increase would be a drop in the bucket of worldwide oil production; it will take many years before oil starts to flow from new wells; and if prices fall too low, OPEC can just drop production a little, causing oil prices to rise again. What’s more, gas prices are also related to a factor that’s separate from oil production: refinery output, which can be hurt by things like hurricanes and floods.
Some numbers: Opening the Arctic Wildlife National Reserve to drilling could lead to production levels that would constitute “between 0.4 to 1.2 percent of total world oil consumption by 2030” according to the U.S. Energy Information Administration. That could decrease oil prices by about one dollar, unless OPEC steps in, in which case it wouldn’t do anything to oil prices at all. Drilling in the Outer Continental shelf could have a similarly small impact: by 2030, it could alter gas prices by three cents per gallon.