Will the new seven-year ban on offshore oil drilling increase the price of gasoline, decrease it, or neither?

Gasoline or gas (North America) or petrol (Commonwealth countries) is a fuel derived from petroleum, which is in turn generally thought to be derived from ancient vegetable matter. Gasoline is an aliphatic hydrocarbon, or the molecules are composed of nothing but hydrogen and carbon in long chains. The energy contained in a gallon of gasoline is approximately 132×106 joules of energy, equivalent to 125,000 BTU or 36,650 watt-hours. This high energy density allows for much of the modern industry and comforts of the modern world through the transportation of goods and people.

A new Rasmussen Reports national telephone survey finds that 54% of Likely U.S. Voters believe the new seven-year ban will increase gas prices, while just 11% think it will make gas prices go down. Twenty-five percent (25%) expect the ban to have no impact on prices at the pump. Gasoline is refined from crude oil via distillation. Gasoline is sold at gas or fueling stations where it is pumped into vehicles. According to national figures from the U.S. Department of Energy, in May 2007, 46% of the cost of gasoline went to pay for crude oil, 28% for refining, 13% to taxes, and 13% for distribution and marketing. While prices have risen to new highs, in inflationary terms, gas prices are still lower than during the 1973 Energy Crisis or the 1979 Energy Crisis; however, the prices will have a likely chance to be much higher than these events combined.

"U.S. Department of Energy" http://cta.ornl.gov/data/appendix_b.shtml

"Energy Information Administration" http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp

"Trends in Pump Price in USA, in 2009 Dollars" http://conservapedia.com/images/b/bb/Gas-price.jpg

One Response to “Will the new seven-year ban on offshore oil drilling increase the price of gasoline, decrease it, or neither?”

  1. bgee2001ca Says:

    At this point, neither but what will happen down the road as supplies further diminish is yet to be seen.