Hello,

We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

Kevin Bullis

A View from Kevin Bullis

Oil Drilling Won't Help This Summer's Gas Prices

Obama agrees to speed drilling, but don’t expect it to help gas prices.

  • May 17, 2011

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.

Want to go ad free? No ad blockers needed.

Become an Insider
Already an Insider? Log in.
More from Sustainable Energy

Can we sustainably provide food, water, and energy to a growing population during a climate crisis?

Want more award-winning journalism? Subscribe and become an Insider.
  • Insider Plus {! insider.prices.plus !}* Best Value

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus the digital magazine, extensive archive, ad-free web experience, and discounts to partner offerings and MIT Technology Review events.

    See details+

    Print + Digital Magazine (6 bi-monthly issues)

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

    Technology Review PDF magazine archive, including articles, images, and covers dating back to 1899

    10% Discount to MIT Technology Review events and MIT Press

    Ad-free website experience

  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning print magazine, unlimited online access plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    Print Magazine (6 bi-monthly issues)

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

  • Insider Online Only {! insider.prices.online !}*

    {! insider.display.menuOptionsLabel !}

    Unlimited online access including articles and video, plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

/3
You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.