WASHINGTON -- America's paralysis over the oil crisis is a textbook example of the ideological divide that has polarized our politics and hurt our economy in the process.
Reducing the price of $135-a-barrel oil and $4-a-gallon gasoline is not that hard to do. This is not brain surgery or nuclear physics. We have it within our power to bring down the price of both by tapping into our vast resources and technology -- now.
That's what Sen. John McCain is proposing to do. Last week, he called for ending the ban against drilling on the outer continental shelf to extract the billions of barrels of oil that lie beneath the ocean and licensing new refineries to turn it into gasoline. Both would not only boost U.S. oil and gas supplies, they would bring down the price of both -- and faster than his critics say.
Just the declaration of this policy by the government would send a clear signal to oil traders and speculators accused of manipulating prices on the open market. They are betting that oil production and gas inventories will remain largely at present levels. That means that as demand rises, traders have been able to bid up prices -- as they would with any finite commodity whose prices rise when demand threatens to exceed supplies.
McCain's plan would break the back of that practice by doing what the traders think we won't: increase oil and gasoline inventories that would bring down the price of gas at the pump. He has also called for licensing 45 new nuclear-power plants, which would further reduce demand for coal and oil and lower fuel prices even more.
Sen. Barack Obama, on the other hand, wants none of this. He is flatly opposed to increased oil exploration and drilling. His energy agenda is all about slapping windfall-profits taxes on U.S. oil companies, and spending that money on new clean, un-invented technologies.
He has further suggested that he would raise taxes on coal and natural gas, too -- money that he would spend on other speculative government energy-research schemes that would push the solution to our energy problems decades into the future.
Equally worrisome, Obama sent an unambiguous signal last week that he was not that bothered by the run-up in gas prices. He wants prices to rise but just not as fast, he said.
In an interview with CNBC, John Harwood asked him, "So could these high prices help us?"
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