Oilprices continued their correction this week as the debate about the influence of speculators in energy markets reached a new pitch. The US Senate yesterday failed to agree on proposals to limit excessive speculation in energy markets and, with oil prices becoming a huge political issue in a presidential election year, attention turns to the House of Representatives, which will debate the issue next week. The correction in oil prices has weighed heavily across agricultural commodities, base metals and gold. Renewed fears about the health of the global financial system and the outlook for economic growth has prompted many hedge funds and short-term momentum players to cut back on their commodities exposures.
Either way, Is America sitting on a potential cure for high oil prices or we’re wasting our time.? There seems to be the two schools of thought emerging as politicians call for expanded drilling in Alaska. However, there is the environmental side and the side that wants to reduce the cost of gasoline. We might not want to admit this, but the U.S. economy slowing down may have a bigger impact on gas prices than we think. This means increased supplies and less people buying gas. This is happening now to a certain extent on oil and gas prices, but for how long?
It’s no surprise that with oil prices at $130 a barrel (oil dropped to $124.00 a barrel this past weekend), lawmakers facing angry voters want to be seen as tackling the problem head-on.
And while it’s hard to deny that the jackpot of all untapped domestic oil lies just north of the Arctic Circle in Alaska’s Arctic National Wildlife Refuge, it’s tougher to say whether or not extracting this energy will benefit our nation in the long run (see:Large oil deposits found in Arctic).
Supporters say it would send a message to the oil market that the United States is serious about increasing domestic supplies, and bring oil prices down immediately. While the country also needs alternatives, they say more domestic production is necessary in the interim to ease the pain on drivers and help offset the huge amount of oil this country imports.
Opponents say that in addition to the environmental damage drilling may cause, there’s not really that much oil there. Focusing on drilling in Alaska, they say, distracts from more meaningful solutions like conservation and alternative energy.
Even if prices were to fall, the drop may be short-lived. “Consumption would go back up,” said Peter Tertzakian, chief energy economist at ARC Financial, a Calgary-based private equity firm.“People would revert to their bad habits, and prices would rise again.”
(We are creatures of habit. Oil may or may not go down, but if oil and gasoline prices would drop dramatically, would America continue to purchase cheap gas? Yes, bet the bank the cheap gas would take over. What happens to the start-up ethanol plants using nonfood biomass? These plants, more than likely might have to shut down).
Tertzakian sees the value of drilling in Alaska from an energy security perspective - the more oil that’s under free-market control the better, he said. And he thinks it could be pumped without too much environmental disruption.
But he also thinks the whole debate over drilling in the refuge is a distraction.
“Only 15% of the energy in a barrel of oil is used to turn the wheels of a car,” he said, highlighting the need for better technology. “You can’t just throw barrels at the problem.”
Well, what’s it going to be: To Drill or Not to Drill?
Drilling may or may not help our oil and gasoline pricing. But it comes a time that Americans NEED to stand up and just say no, we must seek green fuel alternatives and stop the mass transfer of our dollars to oil rich countries.
Experts are saying fuel prices will continue to rise regardless of who is elected President of the U.S.Check this out.
Folks believe me, as long as we stay hooked up to the oil needle, the purchasing of America will only continue. You want cheap gas, or do you want to keep from going broke because of the transfer of U.S. dollars overseas, loss of historical monuments, buildings and corporations being purchased with our oil and gas dollars? Biofuels are the future for our Fuel dilemma. This battle has not been completely won and only U.S. citizens can make the difference. However, corn for ethanol needs to deleted from the biofuel list.