Bush Economist Schools Bush, Republicans: Domestic Oil Drilling Won’t Lower Gas Prices

By Tanya Somanader at 12:40 pm

President George W. Bush stepped away from the ranch yesterday to “opine on the issues of the day” with ABC’s George Stephanopoulos. First up, a lesson on Texas tea. Bush suggested Americans try to “understand how supply and demand works” and realize that offshore drilling is key solution to rising gas prices. “If you restrict supplies of crude, the price of oil is going to go up and it affects gasoline,” he said.
But, in what is becoming an unfortunate pattern for the ex-president, his own former administration official disagrees. Doug Holtz-Eakin, the White House’s Chief Economistunder Bush, joined MSNBC’s Chris Matthews Tuesday to discuss the problem of rising gas prices. When asked whether the conservative “dig, drill” mantra would actually lead to lower gas prices, Holtz-Eakin — who was also the cheif economic adviser for Sen. John McCain’s (R-AZ) 2008 presidential campaign — offered a simple answer: “no“:

MATTHEWS: If we were taking apart the ANWR and drilling everywhere, would the price of gas be much different? In the world market, since this all fungible, if we were doing all that here in the United States, would the price of gas be much different? I‘m just asking that question.
HOLTZ-EAKIN: No, he can‘t change the price very much. So, I mean, he‘s trying to do things—
MATTHEWS: But the conservatives are saying all you have to do is pump like—all you got to do is drill like—Pawlenty said, just got at this, dig, dig, and dig, drill, drill, and drill, and somehow the price of the gas is going to down on the world market. You‘re saying that‘s not true?
HOLTZ-EAKIN: Well, I mean, you can‘t change the oil price very much with the U.S. exploration. It certainly can‘t change it quickly. We know that. And I think Republicans have been honest about that.

Watch it:

Holtz-Eakin is correct that increased oil and gas drilling won’t lower gas prices because the amount of extra oil produced is minuscule compared to consumption. Indeed, any extra oil the U.S. managed to produce would be quickly offset by a cut in OPEC production. “This drill drill drill thing is tired,” said the Oil Price Information Service’s chief oil analyst Tom Kloza. “It’s a simplistic way of looking for a solution that doesn’t exist.” The idea that “Republicans have been honest about that”, however, leavessomething (like veracity) to be desired.
Holtz-Eakin also told Matthews that, though he didn’t believe it’d affect gas prices, he would get rid of the billions in subsidies for Big Oil. “You’ve got to have a tax reform at the levels of the playing field. We know that,” he added. But given the number ofRepublicans that remain opposed to that, it seems he must be using the royal “we.”