As President Obama and his team of regulators bring domestic oil production to a crawl via their moratorium on offshore drilling, standstill on drilling permits, and myriad regulations on accessing oil on public lands, is it any wonder that oil and gas prices are climbing toward the record highs we saw in 2008, prior to the economic collapse?
Last week, Greenwire reported that there were fewer new wells drilled for oil on public lands in 2010 than in any other year in the past decade, and that as many as two-thirds of the permits issued to the oil and gas industry for drilling on federal lands were unused.
Kathleen Sgamma, government-affairs director for the Denver-based Western Energy Alliance, said the Obama administration’s regulations have discouraged new drilling in the West, where BLM controls some 250 million acres. “We were surprised,” Sgamma said, “to see just how much the additional regulatory burden has discouraged drilling in the West.”
Meanwhile, U.S. crude supplies have fallen for the sixth straight week, oil is inching toward $100 a barrel, the highest since October 2008, and retail gas prices are close to $3.00 a gallon.
This has scary implications for an economic recovery — as Ben Bernanke alluded to last week when he testified that he was “closely watching” increasing gas prices which could hurt economic growth.
Some experts are even warning that rising energy prices could push us into another recession. According to Sabine Schels, a commodity strategist for Merrill Lynch:
Back in 2008, [U.S.] crude oil . . . traded above $100 a barrel for about six months before the world economy collapsed into the worst crisis since the 1930s.
Other studies, too, show a strong correlation between rising oil prices and economic recessions. This week’s Fiscal Times:
A 2006 paper from the U.S. Energy Information Agency said, “most of the major economic downturns in the United States, Europe, and the Asia Pacific region since the 1970s have been preceded by sudden increases in crude oil prices.”
And:
James Hamilton of UC San Diego produced a report in 2009 saying that higher oil prices in 2007-2008 impacted domestic spending and auto purchases to such an extent that “in the absence of those declines, it is unlikely that we would have characterized the period 2007 to 2008 as one of economic recession for the U.S.”
— Dana Joel Gattuso is director of the Center for Environmental and Regulatory Affairs at the National Center for Public Policy Research.
I have been saying for 2 years now that unless we Americans address our stupidity for not drilling for more oil on OUR land, we will become slaves to Canada, OPEC, etc. Oil is a far cheaper source of energy than anything else. Sending $700 billion overseas for oil when America in N. Dakota and Colorado have more oil under it than the Middle East combined is insane. It has been predicted such oil could last us 500-1000 years. About 2 million jobs could be created immediately, ease inflation and keeping the dollar inside America would be a great thing. It's called a little independence. Gore recently came out and said he was wrong about ethanol. What else can he and his useful tools be wrong about?
Reply to this commentLinkReport AbuseBrief Summary:CO2/DOSE NOT = GLOBAL WARNING
OR ENCOMPASS THE PROBLEM
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will require and the cooperation of all cities and every nations
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only earth we have and THE {{MEMBRANE ARE WORLD REQUIRES} AND REPAIR
give all children what is their better
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look at the moon it.s quit a thing to view orange eclipse,s DAILY.;
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Robert Steneck
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Reply to this commentLinkReport Abuseactivity and more SNOW MELTS FROM BELOW.
i told them it would require FIFTEEN YEAR,S TO PREVENT WEN REPOSED
WE HAVE A GRATER ISSUES WE CAN ESTIMATE IN DUR ONLY 22% SURVIVAL RATE
IF THERE POLICY'S WANT TO DANCE THAT PEOPLE
THANK YOU
Well, Obama says you're wrong. He's only trying to bring us into the 21st Century when it comes to regulation.
Literally.
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Reply to this commentLinkReport AbuseWhen gas is three dollars a gallon, only a politician would think that wouldn't cause a recession.
In the real world where people live on budgets, when you spend $50 on gas when you had been paying $25, your very likely not going to spend an additional $25 somewhere else, in fact you may not really have an additional $25 for the gas even. No, you would cut back on something else, maybe you won't be eating out, or you cancel cable TV.
I know I don't eat out much since gas prices skyrocketed.
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