Every time the price of gasoline creeps higher, we hear arguments in favor of more domestic drilling. Today, CNN Money tackles the bottom line: What would more domestic oil production do to the price of gas? In short, close to nothing:
According to a 2009 study from the government's Energy Information Administration, opening up waters that are currently closed to drilling off the East Coast, West Coast and the west coast of Florida would yield an extra 500,000 barrels a day by 2030.
The world currently consumes 89 million barrels a day, and by then would likely be using over 100 million barrels.
After OPEC got done adjusting its production to reflect the increased American output, gas prices might drop a whopping 3 cents a gallon, the study said.
"More production from anywhere would tend to lower prices," said Adam Sieminski, chief energy economist at Deutsche Bank. "But the amount that we're talking about domestically, it wouldn't move gas prices from $4 a gallon to $3."
We'll add a bit of a postscript to this news: According to the Energy Information Administration the price of gas has been steadily increasing since December of 2008. The average price for a gallon of regular grade gas in the U.S. right now is $3.84. That's a 98 cent increase from a year ago, which translates, according to ABC News, to big profits for the big oil companies:
Analysts say they expect the world's largest non-government controlled oil company, Exxon, to report a staggering $10 billion profit — a 60 percent increase.
Shell is expected to post a healthy 22.2 percent gain, translating to $5.9 billion for the company, which is right on par with competitor Chevron's profits.
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