Newt's $2.50 Gas Pledge: Plausible or A Bunch of Baloney?

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Newt’s $2.50 gasoline is bogus wishful thinking
• Most of the price of gasoline is the cost of the raw product, i.e., crude oil that needs to be refined by the manufacturers of those transportation fuels.
• Crude oil pricing is based on the world market and world demands.
• The motivation to private industry for drilling is ROI (return on investment), i.e., the cost to drill and the opportunity to sell that product at world market value.
• Anyone drilling for crude oil will sell it to the highest bidder, and that will not be the USA as there would be no motivation for private investors to sell it at half the cost of the world market price.
• Alternative energies are very expensive and require heavy government subsidies, as those alternatives provide low or no ROI for the private sector to invest dollars. When crude is over $100 a barrel and gasoline approaching $5 a gallon, there are ROI opportunities for private investors in alternative energy projects.
• If there was a way to buy crude at below market rates and get gasoline down to $2.50 a gallon, there would never be an alternative energy project funded by private investment dollars, only be those heavy government subsidies derived from taxes on the consumers.

Ronald Stein of CA 5:35PM March 05, 2012

Is Newt Gingrich pandering?
Is the sun going to come up in the east tomorrow morning?

Mandy Cat of FL 5:58AM March 05, 2012

Newt can't possibly promise $2.50 gas ... or, more accurately ... that's all it would be ... an empty promise ... because he can't, and never will be able to deliver on that promise. It's not under his control, it's not under the control of the president.
There is less oil in the world and there are many times the number of fuel users. The US was the largest petroleum user in the world ... NOW ... there are many millions of people in India and China who want to waste fuel like the US has been doing for generations. It's a smaller pie, and there are more people who want a piece of it. THAT determines the price of petroleum.
Fuel reserves are depleting faster than new oil discoveries are being made. Alternative energy sources cannot take up the slack. The only solution is to drive smaller, more efficient vehicles, drive them less, and pay more as we watch prices continue to rise. M.K. Hubbert predicted all of this in 1954 ... and petroleum is just the first symptom. We are wasting all of our planet's fuel and mineral resources.
Get used to it ... petroleum now ... water next ... then you can worry about rare earth minerals. Regardless, we are running out ... so anyone who wants is gonna have to pay more.

Ed Lagniappe of TX 10:08PM March 02, 2012