Obama’s Here To Save The Day!
For everyone who is worried about the gasoline prices we are all paying now, help is coming: President Obama is on the case!
President Barack Obama announced Thursday that the Justice Department is assembling a team to “root out any cases of fraud or manipulation” in oil markets that might be contributing to $4 a gallon-plus gasoline prices.
Well, that’s certainly a relief, isn’t it?
On the plus side, he won’t have to look very far. Won’t even have to leave home. While commodities markets are quite complicated, they do still function on the principles of supply and demand. The lower the supply, and/or the higher the demand, the higher the price climbs. And this administration still refuses to allow resumption of deepwater drilling in the Gulf of Mexico.
To be fair, that isn’t the only thing that is affecting it. Summer driving season is upon us, which means more demand. There is unrest and full-out conflict in several oil-producing nations, which at least threatens to affect the supply. And, China and India continue to expand their automotive fleets, further pressuring the demand side.
And, there is the speculation market. Traders make bets by purchasing and selling units of future production. This can be, and sometimes is, subject to crooked manipulation, but only in the short term. If a speculative bubble gets blown up without the underlying economic conditions to support it, the prices would quickly come back down. I suspect that these Evil Speculators are who the President has in mind to make out to be the bad guy in this scenario. There’s always a Bad Guy for Obama to demonize and go after, isn’t there?
The “Green” movement has pretty much stopped any expansion of our domestic production, both drilling and refining. This has to change, unless we want to pay higher and higher prices for gasoline and diesel, which are already rippling through the entire economy driving the costs of everything.
Folks, windmills and golf cart-cars are not going to solve this problem. We need more production, more drilling, and yes, people need to conserve. As far as it goes, I don’t have a problem if someone wants an electric car. Perhaps they live close to their work to make it effective. For most of us, however, they are not practical. But we can make sure we are driving within the posted speed limits, keeping up proper maintenance, and driving easy to get as much miles per gallon as possible. That alone, however, is not enough.
Back in the Bush administration, they tried hard to open up the ANWR area in Alaska for drilling. Many fought tooth and nail to stop that, citing “trashing the environment,” there was a very small amount there and not worth it (claims I’ve seen widely disputed), and after all, it would take ten years before a drop of oil came out of the ground.
Guess what? That was about 10 years ago. If we’d gotten off our duffs back then and started the process, we would now be, or would soon be, using that crude to add to the world supply. Which would be putting at least some downward pressure on the prices.
So congratulations, Mr. President, looks like you are getting what you wanted: for energy prices to “necessarily skyrocket.” Hope you enjoy your one term.