What should the public make of members of Congress chanting "Drill Now, Pay Less"? Given our second quarter experience of "Drive Less, Pay More", the public is livid and wants action. A review of miles driven and gas prices might be in order.
From the top graph, Americans dramatically increased their miles from 1992 to 2004. From 2004 to the present, the amount roughly levelled off.
So what happened to gas prices while the SUV driving public explored the blue yonder in spades? The bottom graph shows little change in gas prices at the pump from '92 to '04.
The big spike came when demand became range bound, from '04 to the present. Prices rose the most in the second quarter of '08 when drivers cut back 1.8% in April and 3.7% in May. Those sky high prices fueled record oil company revenues and profits for the third year in a row. What an odd picture? Reality is nothing like the ECON 101 dribble offered by grandstanding members of Congress and the Oilmen White House.