The American Petroleum Institute, the U.S. oil industry's main trade group, renewed its call Tuesday for President Barack Obama to develop the country's untapped resources, saying that would lower national gasoline prices.
API President and CEO Jack Gerard told reporters having the country tap into its own crude oil resources will help alleviate global demand by increasing global supply. Gerard made a point of outlining what the president could do immediately to curb gasoline's price increase.
Gasoline on the New York Mercantile Exchange Tuesday afternoon traded down two cents to $3.35 a gallon. Oil traded down $2.41 in New York to $105.68 a barrel.
The U.S. average retail gasoline price, however, hovers near historical highs. At $3.84 a gallon, the price is 30 cents more than a year ago and four cents higher than it was a week ago.
Supply is really what matters. It is a global marketplace, but we look at the factors that go into the price of crude [global demand from emerging economies and the uncertainty in the Middle East], what we can control is what we can put in the marketplace, Gerard said.
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Gasoline is a refined crude oil product, and thus its price is dependent on the price of oil.
By having more domestic oil production, Gerard said the added supply of global oil will prompt a market correction - more oil supply means decreased oil prices, which will in turn cause gasoline prices to drop.
Gerard said the global economy is influenced by supply and demand expectations, and took the opportunity to slam the president on his perceived failure to adequately open up federal lands to the industry.
Gerard said roughly 85 percent of federal lands are off limits to oil and natural gas development, which convinces the global market place that the U.S. is not interested in energy development, he asserted. This perception keeps energy prices on an upward trajectory.
In aggressively developing its resources, the U.S. would force prices down, Gerard said.
Sending a clear message to people who buy and sell crude oil that the United States is committed to reasserting itself as one of the world's major oil producers would immediately put downward pressure on gasoline and other fuel prices, Gerard said.
To do this, Gerard offered an industry wish list: The White House should immediately approve the contentious Keystone XL Pipeline, abandon its plan to repeal industry tax breaks, not put in place added regulations on refineries and increase the speed and frequency with which exploration permits are issued.
If the administration will do these things, our companies will produce more American oil and gas. We will bolster our economy, create jobs, increase revenue, and help drive down prices, Gerard said.
The U.S. Energy Information Administration on Monday released a report outlining how U.S. crude imports fell below 9 million barrels a day - a level not seen since 1999, and the White House this month touted the fact that oil production across the country is increasing. Citing Energy Information Agency numbers that tally federal oil production increases, the White House says federal oil production jumped 13 percent between 2009 and 2011.
In 2009 the U.S. produced 642 million barrels of oil. By 2010, that number grew to 739 million barrels. The number dropped off in 2011, but at 646 million barrels, the country's production is higher than it was, reported the EIA this month.
The API also announced Tuesday it is launching a new Internet ad campaign to bring to the forefront possible solutions to rising gasoline prices, and what the country's energy policy should look like.