Pass The Drill

At this point, I should stop writing about the energy problem and offer a solution.

Our energy problems were not created in a day and they will take more than a day to solve.

But, one thing is for sure, the commodity markets react to news about supply and demand. We will see the demand for gasoline, in the future, be seriously affected by price of oil. $5 a gallon gas will cause a lot of people to change either their driving habits or their spending habits. Something has to change for a fair number of the population.

While an increase in the supply of oil can change the price of oil, an announcement that oil drilling will be expanded in the United States, is enough to put the oil market on notice that the supply of oil in the United States is going to be expanded. This alone would bring down the price. A few new oil refineries would also help the supply side of the equations too.

As much as we would like to think it is possible to be green over night, that is not possible. It should be in the cards for the United States in the future. If the United States was as independent for its energy as it is for its defense, the United States would not be in the energy situation in which it is today. There is more than just a few Americans out there that believe our foreign policy has a lot to do with oil and the people that make their living buying and selling oil in the United States and around the world.

Our government’s policy towards drilling and exploration here in the United States needs to be reexamined. There must be some middle ground with regards to new drilling. If not, then the country can expect a decline in the economy because the demand for oil in the rest of the world is not going to decline in the coming years. Two words: India and China.

What the government may seriously consider is a diesel tax holiday. Yes the 18 wheelers do their share of wear to the roads, but the 18 wheelers bring us everything we consume. We could all drive less, but we all need to eat, and food travels to our tables by truck.

If the government set a goal of $100 a barrel, other energy sources would still be very competitive. With oil on its way from $124 a barrel to higher prices, $100 a barrel starts to look cheap. An announcement by our government can change the spot price of oil in a heart beat. And, believe it or not, the rest of the world would be relieved to see our government take a serious attempt at bringing our economy back. The world does not want to see the United States fall into a recession or worse. They know how important the U.S. economy is their own well being. Stay tuned.