I don't understand. Oil prices are set globally so how would that double the price of gas? If the oil is not profitable to extract the oil companies will not extract it. Its that simple. They don't get to say "this cost us $200/bbl to extract so thats what we are charging" because all they would get is a bunch of middle fingers pointed at them.
You're assuming we can find enough new oil economically feasible at current rates to satisfy our demand if we simply open up the leases. I'm assuming that to meet our demand - to more than double our current production plus new demand within ten years - we would have to also utilize deposits that are not currently economically feasible, such as tar sands. To use those sources, prices would have to go up, which means they would have to be forcibly decoupled from global prices.
I disagree. We are continually finding new oil fields that we had no idea existed and some of them are huge. Who knows how much oil is in the deepwaters of the Gulf alone. Secondly, we can already start transitioning to other fuels right now its just a rather long process and frankly if your bet is that we will still be this reliant on oil in 50 years or so then whats it matter? It will still be a global commodity and we will still be paying global prices for it regardless of where it is produced.
We can and have found some massive reserves, but not I think at a rate that would meet our demand without significantly higher prices and/or new technologies. And as we've seen with hydraulic fracturing, these new technologies tend to bring with them significant environmental disadvantages as well.
I am talking about sinking new wells in new fields and new exploration, not necessarily expanding production of existing fields. So your above point isn't really valid.
To the extent we can find new wells and new reservoirs you are correct. I just don't think we can meet our demand within ten years without significantly increasing the rate at which we draw down reservoirs AND by using reservoirs with significantly higher costs. Lots of known deposits are still sitting idle waiting for prices to rise enough to make extraction feasible.
Where is this "cheaper oil" you speak of? Yes, there are different grades of oil that have different globally set prices but you can look up what a barrel of oil costs right now, where does one go to purchase "cheaper oil" than that? Sure it might be cheaper to produce but it sure as hell isn't being sold cheaper, its being sold at market rate which is set globally. All that means is that whoever its being bought from makes more money not that we would actually get it cheaper.
Right now American companies have but 40% IIRC of our market, so they exploit the cheapest reserves sufficient to meet that demand. They will pump as much oil as possible from those deposits, or at least as much oil as possible without significant new capital investment, but they aren't going to develop new deposits which they believe to be so expensive to recover that their ROI will suffer. It's simply cheaper to buy imported oil. For instance, when a few years ago Saudi Arabia returned to our #2 supplier and Mexico dropped to #3 it wasn't because Mexico ran out of oil, but rather that Mexico ran out of sources exploitable at current market prices. If you're producing oil at $40/barrel and you can potentially produce more at $60/barrel, why do so when you know Saudi Arabia can produce it for $5/barrel? When you're making damned good money you don't get into a price war you know you'll lose. This is why I don't think American companies would produce enough new oil to make us energy dependent without regulatory and tax structures which make it economically feasible for them. Why would they reduce their ROI & risk a devastating price war? Certainly oil companies would love to have more freedom to look in more places and fewer and less restrictive regulations, but freedom to look doesn't necessarily translate to finding new, economically feasible deposits. There's a reason we found the massive, cheaply obtained oil fields of Texas and Oklahoma in the early parts of the least century; we were looking very, very hard and we found the easily obtained fields. There are small oil fields all over - for instance, Tennessee has a bunch, most of which were found in the seventies or earlier and not feasible to work until the last couple of decades - but we've probably found most of the large and cheaply recovered oil reservoirs in America.
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