Libya, Oil Prices And Drilling In America

March 2011, Vol. 238 No. 3

Jeff Share, Editor

My gosh, it’s back……’pain at the pump,’ I mean. This morning I filled up at the neighborhood Exxon station at $3.19 a gallon, a quarter more than I paid the previous week. When I leave today I expect the price will rise to $3.25 with no end in sight unless some brave Libyan soldier decides to pull rank on the colonel by doing what Gaddafi should have done himself long ago, putting a bullet through his diseased brain.

Which also leads to the nagging question – why are so many of these oil-rich countries run by evil despots? With so many of their people under the age of 30 and unable to find decent jobs, should we be shocked in this day of instant communication that the status quo no longer works?

The turmoil in the Middle East obviously is no laughing matter, but the speed at which it has surged forward is beyond anyone’s comprehension. Nor is there any let-up in sight. Are Kuwait and Saudi Arabia next in line? Will Iran and Venezuela gain even more influence in the oil industry? Will the U.S. still be able to pull its forces out of Iraq this year? Will a jittery Wall Street regain its nerve just as stocks seemed to be on a steady rebound? Or will rising energy prices short-circuit the economic rebound?

Here is what you can expect:

1. Huge short-term profits for the oil companies, which will, of course, incense the driving public–especially as the industry and its supporters continue to fight against administration efforts to end some of their cherished tax breaks.

2. A very short delay in getting Middle Eastern oil production up and running again, because no matter who’s in charge they can’t afford to lose those enormous revenues.

3. A slow, if somewhat reluctant effort by the administration to fully restore offshore drilling to the pre-Deepwater Horizon level, and no effort to open up new areas as Obama pledged to do before the Gulf disaster. With the oil industry’s leading lobbyist – the API – now stating that it will financially help candidates who support its policies – it’s an open declaration of war against the administration. Forget what’s in the best interests of the nation – it never works that way.

4. An even greater push to developing natural gas resources. Having full confidence in the environmental and economical benefits of their fuel plus an apparently limitless supply, gas associations and executives are actively pushing forward a strategy that both political parties must pay heed to. Boone Pickens actually has a good idea in proposing that long-haul trucks and bus fleets be converted to run on natural gas, but this goes nowhere until someone comes up with a plan for the delivery system.

5. Bitter debate on Cap Hill as one side will claim Big Oil is profiteering at the expense of the public and that high energy prices reinforce the need for alternative solutions no matter what they cost to develop or how ineffective (i.e. corn-based ethanol) they are in delivering mass quantities of fuel. The other side will insist that we need to drill everywhere in an effort to become “energy independent” even though we lost that battle years ago.

Me? I’m going to sit back and watch. But watch what, you ask. After 20 years as a faithful wrestling fan, I had weaned myself away to Two and a Half Men. So now Charlie Sheen is competing with Gaddafi (or is Khadafi or Quaddafi?) to see who’s the craziest. At least Charlie doesn’t own a country, though I’m sure he’d like to.

Yet all is not lost. The world has learned that Jen has a new “bob”. I’m staring across my desk where I have a (personalized) signed photo of Miss Aniston staring me in the face. And you know what? I don’t see that much difference. Knowing that Jen has never met a photographer she didn’t like, I’m sure Charlie and Muammar have also seen the new “bob” by now.

So guys, what do you think?

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