I’m sure the woman I met in the fruit aisle can’t afford a $32,780 Nissan Leaf if she can’t afford 20 miles worth of extra gas in her weekly commute. Our country just reached her legal debt limit. It makes more sense to make gas affordable than to go into further debt by prematurely relying on "green" technology.
I’d like to see the President take bold steps toward increasing oil production, such as drilling in ANWR and exploring Utah's oil sands. Additionally, I want to see Congress approve courageous spending cuts and pass pro-business tax reforms that encourage job growth and entrepreneurship. Such measures would strengthen the dollar and the overall economy so that Americans can enjoy the oil-driven lifestyle they desire.
Fable #2: Speculation causes gas prices to rise
Recently, President Obama created a special task force to "investigate" possible market manipulation of oil prices. But, blaming Wall Street and capitalists for rising gas prices is a pathetic political move. The New York Times points out: "…most energy experts see no support for that theory. They point out that traditional market forces, like growing demand from emerging countries, and limited growth in oil supplies, can easily account for the increase in prices."
Furthermore, there is significant uncertainty in the market and uncertainty drives speculators to bump up the cost of oil. Global unrest in the oil-rich Middle East and anemic production in stable countries like the U.S. force traders to build a '"fear premium" of $15 to $20 per barrel…into the price of oil to account for further disruptions…,'reports the Associated Press.
Even when the price of oil falls, the price of gas will remain up during a time of market uncertainty. Gas stations only make a few pennies per gallon in profit, so they do not immediately lower their prices when oil prices fall. Gas station owners need to account for lost profits when oil prices skyrocketed and potential profit losses if oil prices swing back up.
Today, the world draws about 35 percent of its oil from North Africa and the Middle East. So, dramatically accelerating U.S. production could help reduce the world’s dependency on oil from high-tension zones, thereby reducing market uncertainty and lowering gas prices.
If we resolutely increase U.S. oil production and get our budget in order, we will stabilize our economy, increase consumer spending and help Americans bounce back to affording a normal, pre-sleepover lifestyle.