$5 Gasoline in the Nation's Capital

Link here. (This is a photograph slide show and the link will probably change over time.) It shows gasoline prices from $4.99 to $5.17 on an Exxon service station sign.

Wasn't it just last month that the president delivered his "Energy Security" speech? For those interested, the 46-minute speech is re-broadcast here.

This was the theme of his speech:

Now, here’s the thing -– we have been down this road before. Remember, it was just three years ago that gas prices topped $4 a gallon. I remember because I was in the middle of a presidential campaign. Working folks certainly remember because it hit a lot of people pretty hard. And because we were at the height of political season, you had all kinds of slogans and gimmicks and outraged politicians — they were waving their three-point plans for $2 a gallon gas. You remember that — “drill, baby, drill” – and we were going through all that. (Laughter.) And none of it was really going to do anything to solve the problem. There was a lot of hue and cry, a lot of fulminating and hand-wringing, but nothing actually happened. Imagine that in Washington. (Laughter.)

The truth is, none of these gimmicks, none of these slogans made a bit of difference. When gas prices finally did fall, it was mostly because the global recession had led to less demand for oil. Companies were producing less; the demand for petroleum went down; prices went down. Now that the economy is recovering, demand is back up. Add the turmoil in the Middle East, and it’s not surprising that oil prices are higher. And every time the price of a barrel of oil on the world market rises by $10, a gallon of gas goes up by about 25 cents.

The point is the ups and downs in gas prices historically have tended to be temporary. But when you look at the long-term trends, there are going to be more ups in gas prices than downs in gas prices. And that’s because you’ve got countries like India and China that are growing at a rapid clip, and as 2 billion more people start consuming more goods — they want cars just like we’ve got cars; they want to use energy to make their lives a little easier just like we’ve got — it is absolutely certain that demand will go up a lot faster than supply. It’s just a fact.

So here’s the bottom line: There are no quick fixes. Anybody who tells you otherwise isn’t telling you the truth. And we will keep on being a victim to shifts in the oil market until we finally get serious about a long-term policy for a secure, affordable energy future.

Putting things in bold helps follow the thought process.