But the point is that oil companies cannot pour their profits into offshore exploration, because lawmakers have put about 85 percent of coastal areas off limits. Of course oil companies want to produce more of a product they can sell for $125 per barrel, but they’re not allowed to. So it only makes sense for Exxon to drive up its stock price when times are good, because the oil business has always been cyclical, and it doesn’t have anything else to do with all those profits, anyway.
More drilling isn’t a cure-all, and Americans understand that. In the same CNN poll, half of those surveyed said they didn’t think more drilling would bring prices down within a year. Yet they still favored more drilling. They understood that more oil would mean lower prices down the road. And more American oil would mean fewer petro-dollars going overseas to fund jihad against Americans.
Besides, simply the prospect that we might drill more should help lower prices.
This week, Democratic senators tried to pass an energy bill to eliminate “excessive speculation” in the petroleum futures market. But a key reason that speculators expect future prices to be high is that they doubt any new oil will be on the market. They’re driving the price up today expecting to make even bigger profits on a scarce resource tomorrow.
If Congress would allow drilling off shore and in the Alaskan wilderness, speculators would realize more oil was on its way, eventually. They’d start speculating on lower future prices, and that would bring down prices today.
It’s certainly true that our country can’t produce all the oil we need. But we can produce more, and bring down prices by doing so. Washington insiders don’t seem to get that. Maybe their constituents -- who do -- will remind them of it this month.