We Can't Drill Our Way to Long Term Energy Answers

The solution to our energy problems is to make more efficient cars and trucks and to invest in renewable energy, writes Indiana University economics professor.

Published: 31-Mar-2005

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Gasoline prices are rising again. Consumers will not get an early relief from it.

According to the Energy Information Administration (EIA) world crude oil prices reached a low of $10.29 per barrel (in 2003 dollars) in December 1998. They remained in the range of under $20 and over $30 per barrel for the next three years but then began an upward climb to a record trading high of $55.67 per barrel set on Oct. 25, 2004. That record was broken when crude oil hit and $56.72 per barrel on March 18, 2005.

The increased demand for oil by the United States, China, India, and other developing countries is partly responsible for the sharp price increases over the past three years. In other words, demand is outstripping supply given the forecast for 2005 global oil demand of 84.3 million barrels per day while crude stocks are 305.2 million barrels. Gasoline stocks also fell to 221.4 million barrels. The average retail price for regular unleaded is $2.10 per gallon and is expected to increase in the coming months as inventories for gasoline and distillate, which is used for heating, fell more than expected according to EIA.

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