Sheep Pay Arabs Billions for Oil, Eagles Drill

In the last two weeks, since American politicians started feeling the wrath of American voters, the world market price of oil has dropped $24.00 per barrel or 16%. Another factor has been President Bush’s largely symbolic lifting of a previous executive order against drilling. I use the term, “symbolic”, because it is my understanding that Congress also needs to act before anything meaningful can be done.

A third factor in the drop in price of oil and gasoline is the decrease in demand for gasoline which, in the USA, has declined about 3% recently. Several columnists have made the point that when gasoline increased to $3.00 per gallon, the American public sheepishly accepted the price increases and the whacky environmental regulations that caused them, but when the price increased to $4.00, the public finally became outraged.

Why has the price dropped? It is possible that speculators have become convinced that we are serious about drilling and building more refineries and have started to dump futures contracts. It is also possible that the demand decrease has had an effect. What I am afraid of is that two other things are also happening: 1. the Democratic leadership in Congress has decided to play a stalling game, hoping that the price decreases will take the heat off them, and, 2. the major suppliers have also increased supplies for the same reason.

If I am right, the American public has to be motivated to keep the heat on even if the price does fall back to $3.00 per gallon, because any real steps to increase supply in the United States will take several years to complete. If we back off every time the price falls, we will be on a merry-go-round for the foreseeable future, because all knowledgeable observers of alternative fuel possibilities understand that the potential of alternatives will take decades to become realized.

Another factor in this equation is that, as T. Boone Pickens likes to point out in a series of television commercials running now, we are witnessing and contributing to the greatest transfer of wealth in recorded history by buying foreign oil. Anything we can do to reduce this flow of funds out of our country adds to our national security and to the strength of our economy. We have been sheep; we must become self-sufficient eagles again.