Efficiency Here, Efficiency Now = Pay Less

Ben Jervey of GOOD dug into the latest Annual Energy Outlook from the Energy Information Administration and found further proof that fuel-efficiency is a much more effective way to achieve gas-price relief than drilling will ever be.

The upshot is that with a policy of achieving a 60 mile-per-gallon average for new autos by 2025 we could ease the price at the pump by 20 cents. A scenario maxed out with offshore drilling, on the other hand, could cut the price by a mere five cents a gallon.

When you think about it, this makes sense. While we are one of the world's biggest producers at number three on the list, there are a number of other big producers too. But we tower over the rest of the world with our 19-million-barrel daily consumption habit. When you are a big producer, you can have a disproportionately large effect on prices in a marketplace (a monopolistic effect, a la OPEC); when you are a big consumer, you can have a disproportionately large effect on a market too (a monopsonistic effect, and with about a quarter of world demand in our corner this describes the U.S.).

Jervey understates the consumer benefits, however. As my colleague Roland Hwang mentions in his blog, consumers will also save thousands of dollars during the lifetime of their new, more efficient vehicles, because they will make fewer trips to the pump no matter what the price.

So -- a lot less gasoline bought, and at a cheaper price per gallon. The simple truth is that efficiency trumps drilling, yet again.