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

[Janet]

Bush took us to war in Iraq.
Congress votes

[rse]

Just because education can be a public good does not mean all education spending is beneficial.

A degree without marketable knowledge or skills merely creates life expectations that cannot be met.

[Extraneus]

Following Janet:

Bush lied about Iraq WMDs.

[Janet]

Che was a hero.

Margaret Sanger was a hero.

[Captain Hate]

Huge, endless sums of money for "education" does not translate to well educated students.

I'd stop short of saying there's an inverse correlation but some of the highest per capita expenditures produce very poor results.

[Janet]

Rachel Carson was a hero & DDT was evil.

[Captain Hate]

Here's what you do when you're too dumb to fill out a bracket: http://espn.go.com/nfl/story/_/id/7722853/new-orleans-saints-senator-dick-durbin-sets-hearing-bounties-nfl

[Janet]

I knew I didn't state it well, Captain. I was just thinking of the DC schools.

[Gus]

I see our emotionally unstable LIBTARD is posting quite a bit this afternoon.

Hahahahhahahahahahahaha!! Someone must have slapped him!!

[Janet]

Obama didn't know Bill Ayers.

[Gus]

Cap'n looks like Dickless Durbin has finished up his work on the budget and is moving on to important stuff. Like getting his ugly mug on TV.

[Captain Hate]

You were fine, Janet; I was just adding my inflated $.02

[Melinda Romanoff]

Gus-

I don't recall Durbin's interest being piqued by Charles Martin, back in '85.

[Captain Hate]

I hate Roger Goodell with an intensely burning flame but I'd never inflict the likes of that drooling fool Durbin (D-ILL) on him.

[Extraneus]

I didn't watch the clip, but this might be a doozy.

Pelosi: Never mind the Constitution, the Declaration of Independence authorizes Obamacare

First, she conveniently ignores what the Declaration has to say about the origins of rights. “We are endowed by our Creator,” Jefferson writes, not, “We are endowed by our government.” Then, she seems to think the Declaration references the right to “a healthy life” and the “liberty to pursue happiness.” Both of those phrases signify something different than “life, liberty and the pursuit of happiness.” The Declaration doesn’t say we have a right to be healthy or even to be happy.

[Gus]

Charles Martin, Charles Martin?? Hmmm, I don't remember that incident.
As a Packers fan, I mourn the loss of Charles Martin. Charlie we hardly knew ye!
Jim McMahon won a second SuperBowl Ring with the Packers in Jan 97. When the Pack went to the White House, McMahon wore a Bears jersey.

[Jim,MtnViewCA,USA]

FDR policies ended the Great Depression.
LUN

[Gus]

Cap'n. I used to see Goodells wife Jane Skinner around town when she was a SPOKESMODEL on FOX 6 in Milwaukee.

Two words for Mrs.Goodell.

ME OW.

[Extraneus]

Btw, Janet, thank you for pointing out Clarice's post from last night. My wife got a kick out of it, even though she'll change her tune when the Secret Service shows up.

[Janet]

There are only 50 States, not 57.

[Melinda Romanoff]

After he put that fork in his eye, he's been sticking his fingers in everyone else's.

[Gus]

The Declaration of Independence, is just thta...A DECLARATION.

It is not law.

[Janet]

even though she'll change her tune when the Secret Service shows up.

You know, it's true nowadays! :(

[Clarice]

Jimmy--2 more:
That heated political rhetoric and Palin's bullseye spurred the Gifford's shooting

That Valerie Plane was a secret agent who was outed by Lewis Libby in revenge for her husband's speaking truth to power.

[jimmyk]

Googling "leftist lies" turns up quite a bit, such as:

“98% of Catholic women use contraception”

This one's a bit dated but still useful:

http://archive.frontpagemag.com/Printable.aspx?ArtId=11815

[Janet]

Violent Tea Party vs. peaceful OWSers.

[Extraneus]

Click image for full size.

[Janet]

FDR policies ended the Great Depression.

That's a good one Jim.

[Extraneus]

Drunken soldiers raid Mali's presidential compound after coup

The whereabouts of the country's 63-year-old president Amadou Toumani Toure, who was just one month away from stepping down after a decade in office, could not be confirmed. The United States Embassy issued a statement dispelling rumors that he had sought refuge in their compound.

[Gus]

How about THE GOP is the party of WALL STREET.

[Ignatz]

--Drunken soldiers raid Mali's presidential compound after coup--

The only semi stable, semi free country in the area falls to the consequences of the Arab Spring and Barry's intervention in Libya.
Marvelous.

[DrJ]

Another one: the Tet offensive was a crushing military defeat for the US.

[jimmyk]

FDR policies ended the Great Depression.

There's a whole category of these that, not to get too literal, are really in the "science is settled" category.

[Captain Hate]

Meghan McCain doesn't want to talk about sex.

[jimmyk]

Sarah Palin said "I can see Russia from my house."

Bush said "Mission accomplished."

Reagan claimed he was at the liberation of Auschwitz because he made a film about it.

[Jack is Back!]

Afghanistan was the good war, if you don't believe me, ask Sgt. Bales.

The auto bailout saved 100's of thousand UAW pensions.

Getting Osama bin Laden was the most audacious military action in the last 500 years.

Major Hasan was a deragnged and lonely guy.

You can keep your insurance carrier (if he is still solvent).

Bill Ayers is just a guy in the neighborhood.

"....my Muslim religion...."

The Cambridge Police Department "acted stupidly".

The Citizens United decision was wrong (ask my Super PAC).

They just keep coming, jimmyk. Tell me to stop, please:)

[jimmyk]

You guys are great, as expected. No offense, but I'm eager to hear from bgates.

[Jack is Back!]

I forgot:

The Nazis bombed Pearl Harbor.

[Gus]

How about: There are no death panels.

[Jack is Back!]

jimmyk,

Don't forget all the mis-statement about history that Obama has made. Refer to the Steyn article.

Rutherford B. Hayes and the telephone.

Columbus and the flat earth society.

Save gas by inflating your tires and using algae.

Lastly, GITMO is finally closed and is now a MLS Stadium under lights.

[Clarice]

I don't blame you,jimmy. I never consider my column research done until bgates weighs in on the topic and Rick coins a phrase I can steal.

[rse]

The human eating machine has landed and should be back in a few hours. Hopefully before his sisters leave for Hunger Games.

So glad he came back early for more schooling.

[Dave (in MA)]

Can't forget this one.

[Porchlight]

jimmyk,

Separation of church and state is in the Constitution.

[Ignatz]

Racism is a conservative phenomenon.
The Democrats ended segregation and Jim Crow.
The Second Amendment is a collective right.
The KKK had no discernible political affiliation.
National Socialists were right wingers.
The smartest man in the world was actually Rip Van Winkle in the right Reverend Wright's church for 20 years.

[Rick Ballard]

Clarice,

I believe that 'etch a sketchy' (as in "Governor Romney was somewhat etch a sketchy in his remarks...." or "Governor Romney gave an etch a sketchy explanation..." may catch on. Soon.

[DrJ]

jimmyk, here's one up your alley:

The stimulus brought the economy out of the great recession because Keynes was right.

[Clarice]

Heh, rick.

Do we have Pelosi's we are guaranteed, life, liberty and the pursuit of happiness in the Constitution?

[DrJ]

The largest threat for violence in the US is from the far right wing.

[Clarice]

Students benefit when classes are ethnically diverse.

Women are not getting equal pay for equal work.

The Europeans have wisely chosen to spend more time with their families than in the grubby pursuit of filthy lucre,

[centralcal]

I dunno, RickB - "etch-a-sketchy" makes me start to itch. Sure hope it doesn't catch on.

[Threadkiller]

Eco-Algore's house vs wasteful Bush's estate:

http://www.snopes.com/politics/bush/house.asp

Even snopes has not unwound that one.

[Ignatz]

--I believe that 'etch a sketchy' (as in "Governor Romney was somewhat etch a sketchy in his remarks...." or "Governor Romney gave an etch a sketchy explanation..." may catch on. Soon.--

Already has on Wall Street; shares of Ohio Art up 100% today. Heh.

[Sue]

I heard on Sean Hannity today that the "white" man's father has spoken up and is playing his own race card. His son, according to him, is Hispanic. This might get interesting after all.

[Jim Ryan]

Conservatives don't care about the poor, but liberals do, and conservatives don't give as much to charity as liberals do. These are common-sense truisms.

Liberals tend to be better educated and more informed, whereas conservatives tend to be less educated and more ignorant.

[Ignatz]

The Muslim Brotherhood says they may offer a Pres candidate in Egypt after all.
The changes that have taken place under Barry in the ME, Asia and Russia are going to haunt us for decades.
He got OBL though. Whoopee.

[Jim Ryan]

Sue, the hoard will just turn their fire on the police and leave Mr. Zimmerman alone.

[Sue]

Jim,

I just remembered the conversation on Hannity when one of the NBA players I follow retweeted a tweet from Mike Tyson asking the cops to do the right thing.

[Jim Ryan]

Jesse Jackson was right there with MLK, one of his right-hand men. He held him as he died and ended up with the blood on his shirt as a result. Jackson keeps up the good fight, carrying MLK's standard.

[Jack is Back!]

Sanford City Council has already vote "no confidence" in Police Chief Lee.

Its a tragedy but more so because it has become politicized even by his parents.

[Jim Ryan]

But, Sue, if Zimmerman turns out half white, then he will continue to be targeted. Half-white interloper.

[narciso]

A rather long, but comprehensive view of the matter;

http://allergic2bull.blogspot.com/2012/03/reasonable-beliefs-prejudice-myth-and.html

[Ignatz]

Santorum has crossed a Rubicon of sorts when he jumps on the etch-a-sketch bandwagon to say we should stay with Barry rather than Mittens. How do you turn back from that and support him when Mittens wins the nomination?
Brilliant.

[Jim Ryan]

Sharpton knows he gets about, I'm guessing, $150K from one of these killings, from the fund-raising afterwards.

[narciso]

From the local perspective, the notion that 'Gore won Florida' and the predicate, that
there are parental rights in Cuba, both ticked me off.

[Clarice]

Adlai Stevenosn was an intellectual.
Al Gore was smarter than George Bush.
Joe Biden is a senior statesman.
Hillary Clinton is the smartest woman on the planet.
Iran stopped its nuclear weapons program.
Bush let Obama escape from Tora Bora.

[Clarice]

OOPS--OSAMA from Tora Bora.

[bgates]

Barack Obama benefited from affirmative action.

Barack Obama promised a net cut in federal spending.

Barack Obama said that if things went according to his wishes, electricity rates would necessarily skyrocket.

One of the smartest men in the Democratic party said that risking the lives of a dozen or so special operators to kill the most wanted war criminal since 1945 was the most audacious military plan of the past 500 years. (I'd really like for everyone to start referring to the Vice President the way he was presented to the country in 2008, as "one of the smartest men in the Democratic party".)

[narciso]

You want to take this one, Capt,

https://twitter.com/#!/mattyglesias/status/21609310186373120

[Jim Ryan]

OSAMA from Tora Bora.

Nice one, Clarice. I'd forgotten about that one.

[Clarice]

Oh, oh. TK--Lord Monkton says Obama's birth certificate is clearly a forgery.
http://dailycaller.com/2012/03/22/lord-monckton-im-no-birther-but-obama-birth-certificate-plainly-a-forgery/

[Threadkiller]

Obama, conceived as a result of activities in 1965 Selma, was teleported to 1961 to complete his gestation.

http://hotair.com/archives/2008/03/30/wapo-reports-on-obama-selma-kennedy-birth-myth/

I hope these help JimmyK. Sadly Ranger has it right. "rhetorical tricks".

[Gus]

I can't wait until Sharpton and Geraldo Rivera (Jerry Rivers) do their RACE HUSTLE THROW DOWN.
Sharpton will do his Tawana Brawley Ebonics shout out, and Jerry Rivers will do his "wise LlllllllllllllllateeeeeeenA" dialect, they'll do the race hustle 2 step, and then they'll agree it was all whiteys fault, and blame the Police Chief.

[Sara]

C'mon people, you want statistics ... we paid 19 cents a gallon for gas on our wedding day in 1969 to fill up the tank in our Firebird 400. So, it is obvious to me that we need to get rid of all these tin cans on wheels and bring back our great American-made muscle cars. :)

[Threadkiller]

This birther stuff bores me.

[narciso]

the image of the three monkeys come to mind,
Yglesias being the 3rd.

http://www.newyorker.com/online/blogs/hendrikhertzberg/2012/03/seconding-ezra-klein.html

[Clarice]

I'm sending Narciso a million La Raza flags but he doesn't seem to want to do his part.

[Jim Ryan]

Very subtle one, TK.

[Threadkiller]

:-)

From Clarice's link:

" “It appears in layers on the screen in such a way you can remove quite separately each of the individual dates,” Monckton said. “You use Adobe Illustrator and each of the individual dates is in its own separate layer. This thing has been fabricated. Sheriff [Joe] Arpaio of Arizona has had a team on this for six months. And he has now gone public and said there’s something very desperately wrong with this and of course nobody is saying anything because the entire electorate has been fooled.”

“I’m no birther, don’t get me wrong,” Monckton said. “I haven’t a clue where Obama was born and I wouldn’t want to entreat into the private grief behind investigating. But the point is, is what he has done on the White House website is he has put up a document which he is plainly a forgery and I would regard that as a very serious matter.”"

What a nutcase.

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

I'm late to the party but Jimmy, what are you doing with that list?

[Jim Ryan]

The free market doesn't work to lift people out of poverty. The reason poverty is as uncommon as it is in America is the social programs opposed by free-market ideologues. The reason poverty is as common as it is is that we have a long way to go yet in moving away from the free-market extreme toward the more moderate place where all Americans are guaranteed a decent lifestyle.

[Gus]

Yeah, he's nutty. Obama is clearly an honest man. I'd give him the benefit of the doubt.

[narciso]

As for the vote of no confidence in Chief Lee, we've seen this not so long ago with
a local police chief fired for doing his job, in the aftermath of slightly more than a half dozen shooting, almost all have been found as justified, they even broke the rules regarding
the safe harbor hearing before the dismissal.

[Jim,MtnViewCA,USA]

I'm liking Dave(MA) the best so far :)
That plastic turkey thing is just the bee's knees.

Troll on another blog says Keystone will RAISE gasoline prices (only in the MidWest).
Keep on keepin' on, Dems. Dig yourselves in deeper, I'm lovin' it!
http://www.bloomberg.com/news/2012-03-01/keystone-oil-pipeline-seen-raising-gas-prices-in-midwest-energy.html

[Jim Ryan]

Question for you econ/business owls: Wouldn't increased domestic production cause domestic gas prices to fall markedly for the following reason? The domestic oil could be sold here without the cost of shipping and therefore at a lower price than foreign oil. How could a buyer in Thailand or pay as much for it as a company in Louisiana? The Thai company has to ship it.

[Ben Franklin]

" almost all have been found as justified, "

Fuck you, you miserable cock-sucker.

[Gus]

Jim, you don't understand, it's all a)speculators, b)Haliburton, c)Bush, or d)Bush.
Transportation is FREE now. Wind and Solar.

Btw. I liked your little doozie about POVERTY and FREE MARKETS. You should have your own blog!
Government saves people from POVERTY!!! HAHAHAHAHAHAHHAHAHAHAHAAHAHHAHAHAHHAAHAHA!!
Not free markets!!! Hahahahahahahahahahahaahhahahaahha!!!!!

[Captain Hate]

You want to take this one, Capt

I'm not sure that my vocabulary is up to expressing what needs to be said about Matty.

[NK]

JimRyan-- Currency valuations. Singaporean, Japanese or Korean consumers may bid up the price of the US produced crude (or especially refined petroleum products) in Dollars to an amount higher than US customers would be willing to pay. That in fact is already happening. PS: tanker transit costs are negligible. Relief for US consumers comes from increased domestic production and increasing the Dollar value relative to world currencies IMO.

[narciso]

Those examples come from this bit from Erickson,

http://www.redstate.com/erick/2012/03/22/forgetting-history/

[Gus]

what would be a downside to producing our own oil?? Remember Obama has said numerous times, that SOLYNDRA et al, are necessary for our NATIONAL SECURITY and to reduce our DEPENDENCE on foreign sources of oil.
Hmmmmmmm. And what if we had our OWN oil. Would that not do the exact same thing for us? And, wouldn't increased exports of OUR OIL, help OUR ECONOMY??
I know I'm a little nutty with these WILD economic theories. I mean, I rarely borrow a cup of sugar from my neighbor, when I have my own. Dig?

[Jack is Back!]

Ben,

Calm down, you're sounding like some freaking liberal.

[Gus]

Jack, did Ben flip out again??? Someone must have slapped him again.

[Extraneus]

Did the sock figure out how to do Ben's avatar?

[Ignatz]

JR,
Oil is a worldwide commodity with a world wide market so the price will equalibriate at the worldwide price level with relatively small local variations.
The following is an example of how a worldwide market can effect local prices from my own neck of the woods.
White fir usually has a limited local market only, which depresses it's price as there is reduced competition for the available supply.
When economic growth in Asia is strong exporting white fir becomes feasible as their demand for wood outstrips their more local supplies. Despite the transport costs of shipping across the Pacific the increased demand drives the price up for US timber owners (and consumers of course). Domestic production of course increases in response to the higher price but the supply seldom sends the price back to its pre export levels until demand itself subsides.

[NK]

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?

[Sara]

Jim DeMint:

"I can tell conservatives from my perspective is that, I'm not only comfortable with Romney, I'm excited about the possibility of him possibly being our nominee," DeMint said. "Again, this is not a formal endorsement and I do not intend to do that right now but I just think we just need to look at where we are."

[NK]

BTW-- what set off BenF?

[jimmyk]

Jane, see my 2:35pm. Responding to a list of supposed falsehoods that ignorant conservatives believe, according to some pretentious jerk at the NY Review of Books.

[NK]

JimmyK-- Ok that's what started it-- alot of the contributions are very clever.