Great Insights From Statistical Analysis

An AP "Fact Check" on the correlation of US energy production with gasoline prices takes us to the border of supply and demand before veering off into a comedy club:

FACT CHECK: More US drilling didn't drop gas price

WASHINGTON (AP) -- It's the political cure-all for high gas prices: Drill here, drill now. But more U.S. drilling has not changed how deeply the gas pump drills into your wallet, math and history show.

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

...

Sometimes prices increase as American drilling ramps up. That's what has happened in the past three years. Since February 2009, U.S. oil production has increased 15 percent when seasonally adjusted. Prices in those three years went from $2.07 per gallon to $3.58. It was a case of drilling more and paying much more.

U.S. oil production is back to the same level it was in March 2003, when gas cost $2.10 per gallon when adjusted for inflation. But that's not what prices are now.

That's because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.

Oh, for heaven's sake - the question is, does additional US production result in lower prices than would have otherwise prevailed?  If, just to seize an example, producers only ramp up US production in response to shortages and rising prices elsewhere, a simple statistical analysis such as done here will "prove" that more production is always associated with higher prices.

Well - Obama's energy plan calls for more investment in clean energy and increasing automobile fuel efficiency standards.  So we eagerly await the next AP "Fact Check" where they analyze the correlation of rising CAFE standards and clean energy output with gasoline prices.

My guess - since we have a record level of solar and wind output yet gasoline prices are also at a record high, the statistical correlation will be clear - all this "clean energy" investment has increased gasoline prices.  

And has the AP failed to notice that gasoline prices have been spiking since electric cars hit the streets and Obama announced stricter fuel economy standards?  Surely the conclusion is inescapable - this push for fuel efficiency is driving gasoline prices through the roof.

Obvi.

JUST RUMINATING: I don't think OPEC has the pricing power it once did, if it ever had.  But taking inspiration from the AP, I won't be letting facts interfere with a good story.  Imagine (HYPOTHETICALLY!!!) that OPEC has sufficient market power and solidarity to control prices (and/or that Saudi Arabia, as a swing producer, can maintain OPEC discipline on aggregate output).  In that world, if OPEC is determined to keep oil prices at a certain level, or rising along a certain path, they will simply cut their production to offset increased US production.  The net impact of increased US production on global prices will be nil, although revenue will flow in different directions.

However!  The same can be true on the demand side.  If the US manages to cut its demand for oil by improving fuel efficiency or substituting clean energy, OPEC could simply reduce output to maintain prices.

Presumably, at some point if the US reduced its demand enough (or increased production enough) OPEC's pricing power would be undone.  And the US certainly accounts for more gloabl demand than global supply, so that ought to be a sensible place to look.

However, the simple statistical analysis done by the AP is unlikely to illuminate these issues.

Comments

[narciso]

The syllabi for his last course, is chock full of the NYRB, Krugman, and co, so that probably set him off.

[NK]

ah...

[Ignatz]

--Ig-- on the currency side, with the CANADIAN Dollar relatively stronger against the US Dollar, you gain an advantage versus Canadian producers, and Canadian Customers may import from you rather than buying local Canadian, correct?--

NK,
The Canadian market is such a mess I don't even know what's going on with them anymore. First they were blitzed by a monumental beetle invasion out west which glutted their markets and wiped out many loggers, followed closely by the financial and housing meltdown which wiped out even more. Couple that with their bizarre Crown ownership of the wood, which almost forces them to cut even when they shouldn't and continuing NAFTA disputes and it will be some years before Canada's logging industry is back in shape.
Things may have improved for them recently but that was the last I've heard of the Canuck situation. DOOM!

[narciso]

On a lighter note, usually Ignatz would post this, this is why I'm LUNing for later.

[Jane (get off the couch - come save the country)]

Thanks Jimmy. You ought to compile it and send it to insty, (and you too)

[Ignatz]

Geez Ben, bad day at the office?

[Extraneus]

From narciso's tasteful LUN:

The always-seductive star recently got under the covers with rapper Tinchy Stryder.

[Ignatz]

--On a lighter note, usually Ignatz would post this, this is why I'm LUNing for later.--

Excellent LUN narc.
At that site I found this creepy story about Jessica Simpson, a person whose fame or talent I am not exactly familiar with.
But she does raise the question of when this revolting trend of every pregnant celebrity and has been feeling the need to pose nude for some gag inducing magazine cover. Why?

[narciso]

It was more about Kelly Brock,

[Threadkiller]

Looks more like a bad day in the orifice.

[OldTimer]

Obama on empty...

http://www.youtube.com/watch?v=EB85GCQFFGM

[narciso]

Yes, Demi Moore started it, which reminds me the whole Fluke episode, is a flashback to St. Elmo's fire, which was also set in and around Georgetown.

[Extraneus]

Yeah, I was cool with Kelly before that passage, but I guess he's likeable enough.

[Rick Ballard]

"The domestic oil could be sold here without the cost of shipping and therefore at a lower price than foreign oil."

Jim Ryan,

Why would the owner of the oil do that? What economic benefit could be derived from selling below market?

The President empowered the Anglo-French coup in Libya as a disciplinary example to other OPEC members. What domestic producer would want to wind up like Daffy?

[Ignatz]

--FYIGM.--

Ever sold a house or a car or anything else for that matter Ben?
If so did you intentionally take less than the market would bear?

[Janet]

The MFM is trying their hardest to stir up some racial trouble. They NEED it.

[boatbuilder]

I must say that I am sorely disappointed with the AP, and with you people as well. Am I now expected to believe that increases in gasoline prices are not caused primarily by evil speculators? I'm not buying it. We've had lots of Congressional Hearings which have established this Beyond Doubt. With more to come, I might add. So don't try to sell any of this nonsense to me. That is why I am so happy to have Richard Blumenthal as my State Senator. He knows how to solve the problems that we hardworking Americans deal with every day.

[Janet]

and jimmyk, how about the "evil religious right"...but it is always Dems giving political speeches in churches.

[Janet]

Stand Up For Religious Freedom rally tomorrow at noon all around the country.

[Danube of Thought]

"The FREEEEEEEEEEEEEE Market."

Is there a different market that you would prefer? What are its characteristics?

(You're right, Ranger. He'll see these as trick questions, and will not answer. I denounce him yet again as a coward.)

[Clarice]

Ah--that reminds me, Jimmy, the violent , crazed military veterans myth

[bio mom]

Santorum supporters: I am curious. Do you agree with this sentiment? You would prefer Obama to be president over Romney, as Santorum does?

Santorum: GOP better off with Obama than ‘Etch A Sketch’ Republican
By NBC’s Andrew Rafferty

SAN ANTONIO, TX — Rick Santorum today suggested it would be better to stick with President Obama over a candidate that might be “the Etch A Sketch candidate of the future” — a shot at chief rival Mitt Romney.
“You win by giving people the opportunity to see a different vision for our country, not someone who’s just going to be a little different than the person in there,” said Santorum. “If you’re going to be a little different, we might as well stay with what we have instead of taking a risk with what may be the etch a sketch candidate of the future.”

[Ignatz]

Messrs Rivkin and Casey on why Barrycare violates the commerce clause.

[Ignatz]

Yeah I noted that earlier bio mom.
Santorum's going to need Rufus Thomas to walk that dog back.

[narciso]

Crikey, he makes my teeth hurt, when he says something like that. What he should have said is we need to show the strongest possible contrast with Obama, is that really so difficult to think up,

[Mad Jack]

Bio mom: This is coming from a guy who endorsed Specter over Toomey. Rick is toast.

[Rick Ballard]

Oil is actually a state/cartel oligopoly with a market component. The President provided a means of enforcing cartel discipline in theoretical exchange for a nice drop in oil prices when Libya came back on line. While I'm sure that OPEC appreciated the disciplinary help I believe the general feeling of the OPEC/Russia consortium is that the President has a very limited future utility.

I wonder if they even bothered with a Thank You card?

[Janet]

from Drudge -
Guilty pleas in Caribbean gay cruise arrests

this is funny -
"They were struck by the beautiful mountains, the clean and clear fresh air and were having a few cocktails, and so threw caution to the wind," she told the court."

Environmental euphoria drove them to inappropriate behavior! Hah!

[boatbuilder]

I'm not a big Santorum guy, but does anyone (including Andrew Rafferty) really think he was endorsing Obama? Lighten up, folks.

[MarkO]

I think Ben-Dana is acting out because Whitney killed herself with cocaine.

[Extraneus]

Who among us aren't vulnerable to beautiful mountains or Fibonacci series?

[Captain Hate]

Yes the meltdown by Howdy Doody in a sweater vest is overdue and time for that creep to hit the road. I'm ready to submit to the inevitability my latter day overlord.

The MFM is trying their hardest to stir up some racial trouble. They NEED it.

I'm trying to figure out what's driving those journonits to stir the ish on that story and the thing that keeps coming back to me is the need to divert attention from how fast the movement is on the case against Sgt Bales in contrast to the Fort Hood massacre.

[Mad Jack]

Endorsing Obama? No. Saying something very stupid. Yes.

[Extraneus]

"Isn't" vulnerable? Who/whom? I can't take it anymore. Frau?

[matt]

Bgates;

So Obama sending in DevGru was more risky than parachuting the 101st into the Salerno Beachhead, Eisenhower's decision to go forward with D-Day, Patton's pivot and attack out of line march at the Bulge, MacArthur at Incheon, and a dozen Special Forces and the B-52's crushing the Taliban in 2001.

wow......Are we sure Barry and Joe aren't in the East Wing smoking their bongs?

These people disgust me.

[narciso]

Back in 2008, Huck was McCain's outflanker to any center right challenger like Teh Fred, I mean this level of incompetence can't be accidental,

[narciso]

OT, the whole Merah episode reminds me of that
terrorist in Kill Shot, the one that Mitch Rapp has to tangle with.

[Danube of Thought]

Apart from the influence on price of the overarching OPEC cartel, the market in the United States is far from free. The entire production cycle from exploration to refining to distribution isheavily constrained. But after discounting all those constraints, the price mechanism still survives to function.

[Ranger]

parachuting the 101st into the Salerno Beachhead

Ok, sorry to be pendantic, but that was the 82nd not the 101st. Normandy was the 101st first combat jump. The 82nd had combat jumps in Sicily and Salerno before Normandy. (You can probably guess that I am an old 82nd guy at this point).

[Ignatz]

Ann Coulter on Romney as governor of a blue state handling the budget.

[maryrose]

Santorum is burning all his bridges now for some reason.His speech after Illinois massacre was feckless. He sounded like sore loser Gingrich.
CH: Congrats to your daughters. You are one great dad

[maryrose]

Ext: Congrats to you.
Clarice Keep up the good work on your "Pieces"!

[Captain Hate]

Thanks maryrose. Hey did you see that the Ohio Tea Party made great gains in the Repub state steering committee? Maybe you didn't because the DeWine affiliated AG refused to release the results for the Morning Monolith to print and I had to find about them subsequently online.

[Jim Ryan]

Rick: Why would the owner of the oil do that?

Jeepers, I misexplained myself. I meant:

The domestic oil could be sold here without the cost of shipping and therefore at a lower total cost to the domestic buyer than to the foreign buyer who has to pay for shipping.

Anyway, if as NK says shipping costs are negligible, then this isn't so.

[narciso]

See he was doing ok, and then 'dialed right up to eleven, from Reuters account;

At a campaign stop in Texas, Santorum renewed his charge that Romney had compromised his ability to challenge Obama on the federal healthcare law by backing a similar plan when he was governor of Massachusetts that included a mandate requiring people to buy insurance.

"Romneycare is a government-run healthcare program, it's mandates, it's fines, it's insurance exchanges set up by the government," Santorum said during a speech at the San Antonio campus of the military-focused financial services and insurance company USAA.

"It's the template for Obamacare," Santorum said, using a term favored by Republicans to describe the federal healthcare law, Obama's signature policy achievement.

The attack is part of a new campaign offensive by Santorum to link Romney's Massachusetts plan, which he signed in 2006, and Obama's federal overhaul ahead of the law's two-year anniversary on Friday and next week's Supreme Court arguments.

"Romneycare is the fundamental difference between Mitt Romney's campaign and mine," Santorum said in a statement released before his San Antonio speech. "I have the credibility and the record to stand up to Barack Obama and Mitt Romney on the healthcare issue and say 'no'."

[boatbuilder]

I'm probably giving Santorum too much credit, but I think his (rhetorical) point was that Romney hasn't really staked out a position much different from Obama on anything. Which is of course why the "etch a sketch" thing has traction. I'm going to vote for Romney, and I'm never going to vote for Santorum unless by some inversion of reality he becomes the nominee, but right now I have about as much enthusiasm for Romney as I had for McCain. I don't need to hear much from Romney, but I'm not hearing it. And just wait until he "moves to the center" for the general.

[narciso]

I think that's a fair reading, boatbuilder,

[boatbuilder]

Thanks, Narc. I had almost forgotten Romneycare. And there goes Santorum reminding Axelrod again.

[matt]

Ranger, my abject apologies. My uncle jumpee with the 509th into Avellino that night and I should have remembered.

[Jim Ryan]

The federal government is well within its rights to decide what health care coverage each American will get.

The new health care law doesn't ration health care.

The current system does ration health care by denying it to people who can't afford it.

[Clarice]

Thanks, maryrose. Hope you are well.

[Jim Ryan]

The new health care law is obviously a good law. Therefore its opponents can only be motivated by (a.) their connections to big insurance profits (b.) their desire to deprive the first black president of this major accomplishment. An example of (a.) is the Koch brothers. An example of (b.) is the tea party.

[Jim Ryan]

The tea party didn't oppose Bush's deficits, but they oppose Obama's. Bush's deficits were as big as Obama's. The difference is that Obama is black. It follows that the tea party is mainly an expression of racial antipathy.

[narciso]

Those mindmelds have got to be painful, Jim, what are you taking for them.

[Jim Ryan]

Ha! Nope, ornithopters are impossible. Try hang gliding!

[Jim Ryan]

Narc, just lots of hard cider. I quit gluten the other day, so bye bye beer.

[Mad Jack]

Good assessment boatbuilder although Mitt has never wanted to be as popular with the cool kids as McCain so I have more faith that he will fight O quite a bit more aggressively than McVain did. Also, the Zero has not held up well once driven off the showroom floor.

[daddy]

Good morning. Catch-up begins.

Guangzhou TV has live NCAA coverage on a Chinese channel, no ads, and no English, and very animated Chinese announcers. Great to see.

CCTV also has live coverage of some Women's International ice Curling contest between Scotland and Canada. It does have ads, but all local Chinese stuff.

Just caught Newt on Piers Morgan doing a nice slapdown of some criticism I believe he must have received regarding DeNiro's black First Lady comment. I'm still not willing to throw the towel in yet, as IMHO he speaks fearlessly and naturally in a way I would kill to see Mitt do.

So who we JOMer's pulling for, the underdog, or MiTT State?

[MarkO]

Read it and weep. No wonder he lost his GOP seat by the largest margin in history. But, this, too will make the GOP stronger?

"Santorum suggests Obama preferable to 'Etch-A-Sketch' Romney"

http://www.latimes.com/news/politics/la-pn-santorum-etch-a-sketch-obama-romney-20120322,0,1519900.story

[Jim Ryan]

But this is real. Ball girl catches baseball. Just click it. Watch the slo-mo.

[jimmyk]

You ought to compile it and send it to insty, (and you too)

I'll do that, but the response has been so overwhelming that it will probably have to wait till the weekend.

[OldTimer]

Obamacare: The reckoning

Krauthammer - LUN

[Dave (in MA)]

Geez Ben, bad day at the office?

He woke up with a feather across his ass.

[scott]

Upon hearing the playbacks for the first time this evening, to my ears, the terrified scream sounds like Zimmerman.

[Jack is Back!]

Gmax,

What the hell happened? Very unlike an Izzo team.

My Bearcats will have their hands full but so far holding their own.

Jim R, I thought that vid had been proved to be photo shopped last year or 2 years ago.

[narciso]

I don't have to remind you, who was the only GOP candidate who succeeded in the 2006 midterms do I, Sherwood Brown, McCaskill, Tester, all rocket surgeons, that came in with the tide.

[OldTimer]

Hmmm,don't know why that WaPo didn't post, let's try National Review for that Krauthammer piece..

http://www.nationalreview.com/articles/294193/obamacare-reckoning-charles-krauthammer

[jimmyk]

So Obama sending in DevGru was more risky than....

Not only was the downside risk no comparison, but there was relatively little at stake. There were no real tactical benefits, it was just a PR/morale booster. And, of course, political.

[jimmyk]

This is the money quote from Dr K:

If Obamacare is upheld, it fundamentally changes the nature of the American social contract. It means the effective end of a government of enumerated powers — i.e., finite, delineated powers beyond which the government may not go, beyond which lies the free realm of the people and their voluntary institutions. The new post-Obamacare dispensation is a central government of unlimited power from which citizen and civil society struggle to carve out and maintain spheres of autonomy.

Well said. I think it's win-win for conservatives, since if SCOTUS upholds, voters know that the only way to kill this beast is to throw Barry out of office.

[Stephanie]

And the Gourds just took the stage.! Woot!

[Jack is Back!]

A reminder as I go to bed to watch the Bearcats v. OSU:

"Is life so dear or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God. I know not what course others may take, but as for me, give me liberty or give me death!"
--Patrick Henry, Speech to the Virginia Convention, March 23, 1775

Feel it,Live it, Do it.

[Frau Irisches Weib]

"post-modernest attitude. You are nothing but a nihilist posing as an intelectual"

Can you say poseur? It pays, in academia, to come up with something cutting edge, so to speak. Anarchy from a solid bourgeois!!!

Just trying to understand your 'science'.
hahahaha

[Ignatz]

Sadly Snopes says the amazing ball girl catch isn't real either, Jim, but I suspect you may have known that.
Cute though.

[Clarice]

Speaking of statistics:http://wattsupwiththat.com/2012/03/10/moncktons-schenectady-showdown/

[Janet]

Good post at Bookworm Room - America is buckling under the tyranny of bureaucracy

It links to another good post at Wolf Howling

"No regulation without representation." If our Congressmen aren't gonna represent us anymore...then let's get rid of them & start electing the czars & regulators.

[Jim Ryan]

Jack, I don't know. Fox is just now reporting it.

[Threadkiller]

http://www.wnd.com/2012/03/immigration-records-missing-for-week-of-obamas-birth/

Another coincidence, I am sure.

[Stephanie]

Any messages for hubby?

[Porchlight]

Hey Stephanie! If you talk to him, tell him I'm happy my JOM friends are at the show. Is donald with you?

[Jim Ryan]

Wow, Clarice's Monckton link is really worth a read.

[Stephanie]

Yes. We're rockin it.

[Stephanie]

Bass?

[Porchlight]

No, Mr. Porch plays accordion and keyboards..sorry, forgot to mention it. Tell donald hi!

[bio mom]

I would be willing to give Santo the benefit of the doubt if he wasn't one of the first to skewer Romney on a misinterpreted statement from an aide. Sorry. Karma. This will hurt Santorum I think.

[Threadkiller]

It really is, Jim.

I am bugged by my "birther stuff bores me" comment. It was ment in a self deprecating humorous way. Clarice, I hope it did not come off as slam of any sort.

Thanks for the link, Clarice.

[Stephanie]

He's tearing it up. Donald says to tell you they rare phenomenal

[Ranger]

Hey Matt, don't sweat it. Just one of those little things that bugs the old 82nd guys.

[Porchlight]

Sweet. Was hoping you would get a good show. The Asheville setlist from last night looked really good. Wish I was there with y'all!

[Clarice]

TK, I knew that. Fear not. *Smack*

[narciso]

It was truly, 'tongue in cheek, TK, although I don't know the point about Monckton taking
that fork in the road.

[Melinda Romanoff]

The Santorum intellect is one question deep. Do not ask a second question on a subject.

And thanks all for the distillate assistance of the last 24, very helpful in understanding the up and down pipeline.

G'night all.

[jimmyk]

The Santorum intellect is one question deep.

Well, if we're going to pick based on intellect, Gingrich would be the clear choice. Of course, in 2008 53% thought they were getting intellect.

[Ignatz]

--I am bugged by my "birther stuff bores me" comment. It was ment in a self deprecating humorous way.--

That's what it sounded like, TK. Did someone take it another way?

[Clarice]

Wait toll Santo starts emailing for money to pay off his campaign debt. Then we can all send him mini etch a sketches.

[Stephanie]

Me too. Show is really good. We need an island band on St Janes although well have to give the libs in the band a special dispensation or something.

[Ignatz]

--Of course, in 2008 53% thought they were getting intellect.--

Well, I'd say snobby, white, upper-class twits thought, correctly as it turns out, they were getting an intellect fully as impressive as theirs.
I'd say everybody else thought, also correctly as it turns out, they were getting their neighbors' and their grandchildren's hard earned wages.

[Porchlight]

Yeah, putting together an all-conservative band isn't that easy. Then again the conservo musicians might be looking for a sweet gig where they don't have to hang out with libs all the time.

[Porchlight]

All right, gotta get myself to bed. Have fun at the show y'all, send back a report! And thanks so much for making the drive. It's nice to get these vicarious reports from both Mr. Porch and friends.

[Ignatz]

BTW for an OT, don't know how many people watch Top Gear on BBCAmerica but Jeremy Clarkson is a wonderful antidote to the PC crap, especially global warming baloney.
He just drove (OK it was a repeat from 2007) to the North Pole to prove the automobile has done nothing to the ice cap.
He's usually pretty insulting to Americans but it's still fun.

[Captain Hate]

Also OT, any of you guys fans of Treme? I just got season 1 from the library and watching it with musical commentary is outstanding for anybody who likes N'awlins music. My youngest Hatette once ventured down there and caught Kermit Ruffins in a club off the beaten path; good to see him land a good gig on this show.