According to the chief Keynesian economist, increasing the supply of a commodity (oil) will not lower its price:
“We are not going to be able to just drill our way out of the problem of high gas prices,” Obama told workers at a Daimler Trucks North America factory that makes vehicles that run on natural gas.
“Anyone who tells you otherwise either doesn’t know what they are talking about or they are not telling you the truth.”
His visit to North Carolina, where Obama needs to win over blue-collar voters, reflects a White House effort to link energy innovation to job creation by highlighting steps to improve fuel efficiency and cut U.S. dependence on foreign oil.
“We may not get there in one (presidential) term,” Obama said. “It is going to take us a while to wean ourselves off of the old and grab the new. But we’re going to meet this challenge.”
Increasing the supply oil will not reduce its price… Classic. Liberal. Economics.
The most visible petrochemical is gasoline. It is frustrating to pull into a gas station and see gas prices flirting with $4.00 in most areas and even higher in others. However when Obama and is minions claim that we should ‘wean’ ourselves from oil, they are kidding themselves. We derive more than gasoline from oil. It is not a stretch to say our entire economy and modern lifestyles are possible due to petrochemicals (oil derivatives):
A huge variety of petrochemical products are found in many different industries. In fact, some industries such as electronics and computer sectors could have not developed without petrochemicals. Petrochemicals are also used to meet fundamental human needs, such as health, hygiene, housing and food. It is an inventive business sector that is constantly adapting to new environments and meeting new challenges.
The quantum leap in communications technology has been made possible by petrochemicals. For example, the computer could not function without microchips, made using petrochemicals, while the computer housings and keyboards are made from styrenic plastics. CDs and CD-ROMs start with a simple piece of plastic made from polycarbonate, a plastic derived from benzene and propylene. The transparent box in which CDs are stored is usually made from polystyrene.
In the transport sector, petrochemicals contribute to saving energy and improving safety. For example, synthetic rubber gives tyres better road-hugging ability while phenolic resins are used in binders for friction materials in brakes and clutches. Special coatings to give unusual colour effects have been developed for cars. Approximately 100kg of petrochemical-based plastics in a modern car can replace 200 to 300kg of traditional materials. So nylons are replacing metals and polycarbonate is replacing glass.
Petrochemicals make a contribution to the progress in health care and hygiene. For example, cumene and phenol are used as a starting material to make aspirin and penicillin. Some petrochemical resins are used in drug purification, making it easier to mass produce drugs. Plastics are essential for making disposable syringes, containers for storing blood and vaccines as well as medical devices such as inhalers.
In the construction sector, petrochemicals are used in the pipes, windows and paints found in buildings. A more unusual application is the use of polyurethane chemicals in the insulating panels for a luxury hotel in Dubai. The transparent roof the Olympic stadium in Athens is manufactured from polycarbonate.
In the home, products based on petrochemicals are found everywhere. Working surfaces, shelves and tables are easy to wash thanks to laminates manufactured from petrochemicals. The cooker, microwave oven and refrigerator are amongst the numerous fixtures moulded from polymers. Non-stick frying pans coated with petrochemicals are easy to use and do not need to be scrubbed while liquid detergents made from ethylene make dish washing quicker and more hygienic.
In the bathroom, we find petrochemical-derived products from floor tiles through shampoo bottles to the toothbrush. Easy-care clothing, carpets, curtains and furnishing fabrics are made from man-made fibres derived from petrochemicals.
Obama’s solution to high gas prices is to produce fuel from algae. However, can plastics or penicillin be derived from algae?