Oil and the Tax Bill

Gas and Cars
Gas prices might continue to get lower. This is because the government is going to allow more drilling. The current tax bill, which is making its way through Congress, includes a provision about oil exploration. Why is it in a tax bill, you may ask? Well, that's just what Congress does. Both parties, depending on the bill, have been known to include side projects in bills. I suppose it’s a way of sneaking extra things in the bill that might not necessarily pass if they are on a separate bill. For example, Congress is also about to repeal the individual mandate for health care. This is also attached to the tax bill. It's amazing what types of things, which have nothing to do with the main bill, can be attached…
Read More

Drill, Baby, Drill

Gas and Cars
"Drill, baby, drill!" That was a slogan used during the 2008 Republican National Convention. This slogan was used during the gas crisis at the time. The national average of a gallon of gas was around $4.11 per gallon. Now, the national average is about $2.49 per gallon. What changed? The easy answer can be found in the slogan and basic economics. First, let's talk supply and demand. When there is more of something, the price goes down if demand is held constant. When there is less of something, the price goes up if demand is held constant. The key to lower gas prices was that more oil was extracted from the ground. I remember when the U.S. and Saudi Arabia started pumping more in a price war. It was more…
Read More