The law of supply and demand has been repealed!

On 3/21/12 The Associated Press published this article:

FACT CHECK: More US drilling didn't drop gas price

The article refers to statistical studies done by university professors.  These studies conclude that during periods when the US has increased domestic drilling gasoline prices did not decline.

It would be intuitively obvious to the casual observer that oil exploration drilling (domestic or international) will only increase during times of rising oil prices.  Would it make economic sense to explore for new oil fields when  oil prices were declining?  Therefore it is to be expected that oil drilling will increase when oil prices increase.  And it is also to be expected that statistical analysis of historical data would show a correlation between increased drilling and rising gasoline prices.  But, you cannot infer from this data that there is no correlation between increased drilling and a subsequent reduction in gasoline prices (or a moderation in the subsequent increase in gasoline prices).

How can anyone seriously make a claim that an increase in the supply of oil will not reduce the price of oil?  Contrary to the underlying conclusion of this article the law of supply and demand has not been repealed.  The largest single expansion in worldwide oil production occurred after the Islamic revolution in Iran interrupted oil production.  The spike in oil prices in late 1979 caused an unprecedented increase in oil exploration.  The North Sea oil field was one of the discoveries from this exploration.  When the North Sea oil along with other new discoveries entered the market the price of oil plummeted.

This Associated Press article will no doubt be cited by many businesses in the alternative energy industry as another reason that they should receive taxpayer subsidies.  This article is deceptive and should be exposed as such to the general public.