American Petroleum Institute (API) held a press conference Tuesday addressing high gasoline prices and noted that more crude oil production and efficient consumption of oil products are key to addressing higher gasoline prices, API's Chief Economist John Felmy told reporters.
"We have very large oil resources here in the United States and technologies that are making more of them accessible and economic to produce," he said. "Given reasonable regulations, expanded access to resources on federal lands and waters, and fair tax policy, we can bring several million more barrels per day of crude oil to market. It could create more than one million new jobs, reduce our dependence on foreign energy, and increase revenue to the government by billions of dollars a year."
API reported that as of last week, the average U.S. retail price for regular gasoline was $3.78, about 56 cents per gallon higher than two months ago. Crude oil prices are largely set on international exchanges which are determined by global supply and demand. Crude oil prices increased $12 a barrel, or 29 cents per gallon, between December and February, stated API. During that same period, the price of gasoline increased.
Due to a strong demand for world supplies, crude oil prices have increased. There's more optimism about the global economy, which is growing faster and demanding more oil, according to the Energy Information Administration's short-term outlook. However, crude supplies fail to keep up with the demand. In January, domestic crude oil production went above 7 million barrels of oil per day in the United States for the first time in more than 20 years but international production has been less robust, API stated.
"We have not done a good job of expanding opportunities for domestic oil and gas development in federal areas," he said. "The vast majority of the nation's offshore oil resources continue to be off limits."
The organization also stated that if the United States approves the Keystone XL pipeline, the increase in capacity for bringing Canadian oil into the United States would encourage more production into Canada's rich oil sands region. API also reiterated that if supply is increased, than demand is reduced.
"With gasoline prices already approaching $4.00 per gallon and projected to reach all-time record highs during the upcoming driving season, the economy continuing to struggle and unemployment rates refusing to come down, developing domestic energy resources is more important now than ever," said Michael Whatley, executive vice president of Consumer Energy Alliance, to Rigzone.