President Obama loves to blame speculators. Yes, speculation adds an estimated 10% to the cost of oil, but he refuses to do anything to change the rules of the game or the supply of oil. Four billion barrels of oil are traded every day, but we consume only 83 million barrels of oil per day.
Why so much trading? With limited supply and the low cost of trading, speculation pays off. Increasing supply would impact speculation, but that takes time. Raising the energy trading margin requirements so that it's impossible to trade with little or no money down would immediately decrease excessive speculation.
The President misleads Americans on our oil reserves, claiming that we have only 2% of the world's reserves. It's true that we have only 20 billion barrels of "proven reserves," reserves that companies have explored for, drilled for, and can report to the SEC as their own assets. But this avoids the reserves that Obama has declared off-limits. The Institute for Energy Research reports that America has more than 1.4 trillion barrels of oil that is recoverable--fueling us for over 200 years at current rates of consumption. The largest deposits are located offshore, in portions of Alaska, and in shale deposits in the Rocky Mountain states. Developing those reserves means more supply, lower prices, and more jobs.
When President Obama took office the price of gas was $1.83/gallon. It is twice that now. His kind of "hope and change" taken all our "change" at the pump. It's time for a president who will bring more than words to our "all-of-the-above" energy plan.
Chevron CEO John Watson reminds us, "We have an energy system that's been built up over the last 100 years, and the principle behind it has been affordable energy. And we've seen oil, gas, coal, nuclear and renewables contribute to that energy mix. The idea that we can force energy into the system that's not economic before it's time, is not the policy that I think this country needs. What we need is open markets, consistent tax and regulatory policies, and to be clear about our priorities."
In response to big oils limited investment in the US, Watson asserted: "We have to spend money where we have access and the proper geology.... We invest where we have the incentive to do so." Which candidate do you think will provide the incentives and the consistent policies that can unleash our vast reserves in an environmentally responsible way, stimulate our anemic economy in need of affordable energy, and generate energy jobs that last?
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