I see with great amusement that our benovent leader President George W. Bush has lifted the Executive ban on offshore oil drilling. He is now urging congress to lift federal bans as well. Leadership is about a lot of things and one of those things is having forsight. Bush is sorely lacking on this front (amoung many others). Anyone with half a brain and that still has a pulse could probably have predicted that oil prices would go up. Oil is a finite resource and the demand for it has increased signficantly. This is not a new trend. Leadership identifies issues like these and proposeses potential solutions. We haven’t seen this from our current President.
Here are some interesting quotes on this:
“If we were to drill today, realistically speaking, we should not expect a barrel of oil coming out of this new resource for three years, maybe even five years, so let’s not kid ourselves,” said Fadel Gheit, oil and gas analyst with Oppenheimer & Co. Equity Capital Markets Division.
“Candida Scott, an oil industry researcher at Cambridge Research Associates, said oil needs to be priced at $60 a barrel or more to justify deep-shelf drilling. With oil now selling for $145 a barrel, companies are almost assured of profiting from offshore drilling, Scott said”.
“In his statement last month, Bush also renewed his demand that Congress allow drilling in Alaska’s Arctic National Wildlife Refuge, clear the way for more refineries and encourage efforts to recover oil from shale in areas such as the Green River Basin of Colorado, Utah and Wyoming”.
The real solution to America’s oil problem come down to a mixture of strategies. First, reduce usage – this can be accomplished by mandating higher CAFE standards. Second, encourage the use of alternative fules – the government should give tax incentives to American companies that do R&D and product introduction in this area. Third, encourage electric cars. This is a no brainer to me.
Additionally, we need to build nuclear power plants and leverage clean energy technologies such as wind and solar wherever they make sense. Coal and Natural gas don’t make sense over the long term anymore than encouraging people to drive gas guzzling trucks.
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