Re: Obama: 54.5 Miles per Gallon by 2025
The problem with drill baby drill is the theory relies on private, for profit, oil companies injecting more product into the market to bring the price as a whole down.
If they merely replace existing product, i.e. inject 500,000 barrels a day from the U.S. but the Saudi's cut back 500,000 barrels a day, it's a zero net sum and nothing changes.
So, we have to believe that...
1. All the new exploration will result in MORE product in the market, not replacement product
2. Private for profit oil companies are willing to self-inflict lower profits by over producing in a market which proves everyday it will bear the current costs.
I'm not buying #2 for a single second.
Until consumption drops to a point that oil company's profits are harmed the price of fuel isn't going anywhere no matter how many permits we hand out.
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