Politicians propose increased domestic drilling to lower gas prices at the pump.
Two issues should be coupled/logrolled. Propose to allow increased domestic drilling subject to the implementation of a $2.50/gallon price cap at the pump, with appropriate penalties for gougers. If increased drilling is such a cure-all, the cap should not bother oil producers.
While price caps are almost always a bad idea, proponents of increased drilling are making nonenforceable promises to American drivers that gas prices will fall significantly. Why not make these promises enforceable?
I agree
No opinion
I disagree
Add your comment
I disagree and I think you really do to.
You don't really support price controls and signed promises--they don't work. "Gouging" is just capitalism--I can't even see why it's illegal. Let the seller charge what the buyer will pay.
I think the way to break the price of gas isn't in more supply but in more competition. But since we're down to very few oil companies now, this isn't happening now. Remember when we had Fina, Clark, Skelly, Texaco, Vickers, etc. These have all closed in the last 15-20 years. I don't know if it's still possible for little-guys to get into this business but I do know that it's usually the ants that eat the elephants when they die.
The promise of drilling, aside from the fact that the eventual quantities will have almost no effect on current production, is that the oil produced will not hit the market for ten or fifteen years and no one can predict that far into the future what the situation might be. Efficiency and conservation and exploration of secondary energy resources promise far more than drilling can produce.
I don't think you could set a "cap" that is dramatically lower than the current price. The oil companies would have to spend a fortune to ramp up drilling. How could we expect them to increase their spending and cut their prices at the same time?