"Studies show that if we opened one reserve in Alaska now, in five years, gas prices could be at $2 a gallon."
Stephen Fincher on Friday, December 30th, 2011 in an interview with the Union City Daily Messenger
Congressman says if one Alaskan reserve was opened, gas prices could drop back to $2 per gallon in five years
U.S. Rep. Stephen Fincher, the 8th Congressional District Republican farmer from Frog Jump, is the latest to make such a claim.
"Studies show that if we opened one reserve in Alaska now, in five years, gas prices could be at $2 a gallon," he said in an interview with the Union City Daily Messenger published on Dec. 30, 2011.
Fincher’s assertion sounded suspect to us, so we asked his office multiple times -- in phone calls and email -- which study or studies he was citing. The congressman’s staff never responded to our requests.
We could find no evidence of any study like that mentioned by Fincher, so we asked three energy experts if the first-term congressman representing most of Northwest Tennessee and parts of Shelby County could be correct. All three said they are not aware of the existence of any such study.
"That certainly wasn’t something that came from us," said Jonathan Cogan, spokesman for the Energy Information Administration, the government agency that collects and analyses data on energy and its impact on the economy and the environment.
"I don’t know what he’s referring to," Cogan said.
Neither did Tom Kloza, chief oil analyst for the Oil Price Information Service.
"You can probably find a study out there that might indicate that the Kardashians would be better professors at Yale than some of the professors there," Kloza said. "But I wouldn’t give much credence to it."
A bouillabaisse of factors leads to higher or lower gas prices, Kloza said, but "there’s no one out there suggesting anything like that, other than the suggestion that if we have a great recession like we did in 2008 or 2009, we could see prices below $2 a gallon."
Rayola Dougher, senior economic adviser for the American Petroleum Institute, made the same point.
"When people look at forecasts," she said, "they are looking at a lot of different assumptions. Nobody has a crystal ball."
The average price of a gallon of regular was $3.26 in December 2011, according to AAA’s Daily Fuel Gauge Report. The day Fincher’s interview was published, the average price was $3.27.
The lion’s share of the price of gasoline is the cost of crude oil itself. Another $1 or so goes for taxes and the cost of refining, marketing and distributing the fuel, Dougher said.
For gasoline to fall below $2 a gallon, the price of crude oil would have to fall to about $42 a barrel -- far below crude’s current market rate of roughly $101 per barrel, Dougher said. (Her calculation is based on the fact that, once the $1 in taxes and other costs is deducted from $2-a-gallon gas, that would mean the per-gallon cost of crude would have to be about $1. There are 42 gallons in a barrel of crude, so the price of a barrel would have to fall to $42 before $2 gas would be possible.)
Fincher is "conceptually right" in one sense: If more supply is brought into the market, "we’ll have more stable security, and bringing in more supplies is always a plus," Dougher said.
"But," she said, "how that would influence the market would be in question. I haven’t seen any studies saying $2."
One of the principles of our Truth-O-Meter is that elected officials are accountable for what they say. But in this case, Fincher failed to provide evidence of his enticing claim. And to the contrary, experts told us that they know of no such study, and even if one were to pop up, it would still be misleading to isolate just one of the many variables that can impact the price of a gallon of gas.
We rate his claim False.