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The US wants the price of gas to be higher

Name: Anonymous 2008-05-06 22:58

The US has enough reserve petroleum to lower the price to $1-2 per gallon, but chooses not to.  So many other products rely on petroleum that lowering their price would only hurt the economy, causing a surplus that would end more jobs, just like overproducing crops hurts farmers.  Also, the price of oil needs to go up a lot before oil shale becomes economically feasible. 

Estimates vary, but gas could be $6-8 per gallon before oil shale is cost effective, due to mining costs and the expensive extraction process.  Several billions of barrel of oil can be produced from natural oil shale reserves, but companies want to wait so they can mine and process this resource when it will be most beneficial to board members and shareholders, boosting stock prices to record levels.  If the US tapped into its liquid oil reserves now, prices would remain too low for too long to take advantage of oil shale in a reasonable timeframe. 

Name: Anonymous 2008-05-07 4:31

>>3

Gas is $3-4 and people still buy it at that price, so they keep producing the same amount of gas and don't increase production.

Solution: Use less gas and their profits go down.  Less demand -> lower prices.  Economics 101!


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