In 2008, Candidate Obama campaigned against Republican-era high gasoline prices. Now that pump prices are high with a presidential election looming, President Obama disclaims responsibility. “We cannot drill our way to lower gas prices,” he says.
Crude oil is a fungible commodity, the argument goes. So why should we Drill, Baby, Drill when any domestic supply we might add is a relative drop in the bucket? Nice argument, except that it could be used against having any new production. (And U.S. CO2 emissions at the margin are a drop in the bucket, right Mr. President? ) And as the economic revolution of the 1870s taught, economic value and thus prices are set at the margin.
Marginal Economics
The United States is the world’s #3 oil producer. Domestic policy decisions in the U.S.…