The Cause of the Crude Oil Crisis: Speculation

The only way for the U.S. Congress to have any effect on the price of crude oil in the short term is to end the speculation on crude oil in the world commodities markets.

Anyone who has followed the commodities market in oil knows this. All one has to do is watch the frequently wild fluctuations in crude prices as well as stocks indexed to the price of crude oil in intraday trading to know this.

As I’ve stated previously, crude prices can have marked fluctuations based on worldwide oil related news. For anyone not able to follow the prices daily but who have wanted to invest in these stocks, they could be assured of long term gains in spite of market variability based on one fact alone. And that fact has been that the United States Congress in catering to environmental special interest groups would, in effect, do nothing substantive to give Americans relief from rising prices.

That’s right. The current and future increases in the price of crude oil can be directly attributed to the absolute inertia of the U.S. Congress, it’s complete inability to function effectively, a total lack of will to reach consensus and act responsibly. The Democrats have controlled Congress for two years and done nothing. Even more reprehensible is that the Republicans controlled Congress for six years and did nothing.

What can be done?

1. Open areas for exploration and drilling offshore on the east and west coast, west coast of Florida in the Gulf of Mexico and in the Florida Straits.

2. End ethanol subsidies.

3. Remove the tariff on Brazilian ethanol.

4. Streamline the process for approving new nuclear power plants and provide incentives for power companies to plan new plants.

5. Provide incentives and subsidies for domestic coal gasification and processing shale oil.

6. Remove barriers and streamline process of developing and constructing wind farms and solar farms and provide incentives.

7. Place a moratorium on the exportation of offshore rigs from the U.S. until domestic offshore exploration needs are met which would involve canceling any current contracts for rigs being built for foreign use based on a national emergency.

8. Immediately begin a national program to expand both rail capacity and coverage to markedly reduce or eliminate the use and need for long haul trucking as well as to provide a viable alternative to domestic air travel.

9. Provide incentives for construction of new refining capacity.

There are probably other things that could be done but these would do for a start.

The news of the United States government finally doing something will have an immediate effect worldwide.

Here’s the scenario:

The patient, the American public and the U.S. economy, is hemorrhaging to death and the doctor, the U.S. Congress, is planning his next golf game without even putting pressure on the bleeder with his finger. Frankly, it sounds like malpractice in the form of criminal negligence to me.

When the patient dies, who’s going to be pointing the guilty finger at whom?

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