Yesterday March 31, 2010 President Obama gave us an early April’s fools joke. What was it? His claim to be expanding off shore drilling. The problem is just about a month ago his Department of the Interior put out new rules for drilling. They closed off the promised sites in the MidWest which are loaded with oil and put in more regulations to slow down any new drilling. The new areas he is allowing to be drilled are very limited areas and it will take years for the oil companies to get anything up and running.
So what was the point in allowing the new offshore drilling sites then? The reason is simple, it gives Obama something to point to when gas prices increase this summer. Gas is going to quickly rise above the $3 mark again and the President will say “It’s not the government’s fault your gas prices are rising it’s those greedy Oil companies trying to cheat you to make a profit.” The President will stroke the flames of outrage against the oil companies which the people will see as gauging them. After the President and the Congress has fully demonized the oil industry he will push for his Cap and Trade policy promising to control the greed of the Oil executives.
The problem is he can’t control the price of oil and gas. It’s because of the law of Supply and Demand will still be at work. China and India have become huge consumers of oil and as a result the US has rivals for a very limited supply of oil. As always when there is a small or limited supply of a product but a large demand prices will increase. This is true for baseball cards, comic books, rare paintings, and OIL. People are so use to just having gas that we sometimes forget the way economics work and we start hurtling curses at the oil companies. Despite the rise of gas prices the American people can’t afford to be sucked into this class warfare, anti-business attitude that will be coming from Washington this summer.
The best thing Washington can do is allow domestic companies to start drilling in all our oil reserves in this country, not limited it to a small number of zones. We as a nation need to start developing our own sources of energy: oil, natural gas, nuclear and coal; and get away from “cheap” sources from other nations. This will give us our own secure sources of energy and stop feeding the banks of our enemies.