My response to the article Fact: Drilling Does Not Reduce Gas Prices
First draw a standard graph using Cartesian coordinates. The Y axis we will name PRICE and the X axis we will name QUANTITY. Now let us plot the standard basic supply curve. It is a positively sloped curve. The supply curve is positively sloped because as price increases the quantity supplied increases.
Think of it this way; when oil prices are low, those who drill for oil will only drill in places where it is easiest and less expensive to get oil. However, as the price increases then it becomes more profitable to drill in more difficult and more expensive areas to drill. So, the price increase correlates positively with increased production. Look at the supply curve again and you will see it correlates positively with increased prices.
Have an army of statisticians look at the numbers and you will see increased productivity does not correlate with lower prices; increased productivity correlates with higher prices. Yes, I ran the numbers myself.Read More »