by Lone Shark
In yet another episode of the ongoing series “Where have I heard this before”, Senator Bill Nelson is upset yet again about the latest spike in gasoline prices. But rather than take the more obvious path to lower gas prices and greater energy independence, which would entail opening up American shores and land to oil exploration and drilling immediately, Senator Nelson thinks that the route back to lower prices at the pump is to go after oil speculators- a dubious diversionary tactic that completely distracts from the havoc that the Obama Administration and the Department of Interior have wreaked on our domestic drilling industry as well as on future exploration efforts. Nelson is content to use oil speculators as a convenient whipping boy to cover for the failed energy policies of the Obama Administration rather than address issues pertaining to the more relevant cost drivers of gasoline.
That a government clampdown on oil speculators would make a sustained difference on the price of gasoline is not a settled issue. Nelson also treated the speculators as disruptive boogeymen back in 2008 when he sponsored legislation to ban unregulated speculative trading of oil futures and energy commodities. But here’s the rub- the price of gas declined substantially even without Nelson’s legislation passing. At about the same time, then President Bush lifted the Executive’s ban on outer continental drilling, and later that year, Congress allowed the congressional moratorium on outer continental drilling to expire. Both of these events caused the price of oil to decline substantially in the second half of 2008, and yet speculators continued to speculate. Nelson’s complaining about gas prices disappeared, but now it’s back again at a politically opportune time. Senator Nelson needs to be asked the obvious- which was a far more relevant cost driver of the price of gasoline in 2008- speculators, or our self-imposed national moratorium?
A sustained national commitment to exploration and drilling will increase future energy supplies, which will cause oil prices to drop, particularly if world demand also declines. Supply and demand will always be the two most pertinent drivers of gasoline prices- and our nation is not nearly doing enough as it pertains to the supply side. We have little control over the instability and unrest in the world that’s presently taking place, and it’s an undeniable fact that speculators account for the direct relationship between world news and oil prices. Nelson is clearly uncomfortable with some of the less known components of a free market system, which is why he periodically goes after oil speculators, an easy target who are incapable of defending themselves.
And here’s some more unfortunate news for energy prices- President Obama’s FY 2012 budget proposes a massive tax increase on gasoline- a $328 Billion dollar line item in the budget identified only as “Bipartisan Financing for Transportation Trust Fund”- give President Obama credit for his utter brazenness as well as his low opinion of the public’s ability to read his fine print. Will Nelson will express his opposition to this latest proposed gas tax increase, considering how concerned he is about gas prices?
Senator Nelson can talk about why gas prices are increasing until he’s blue in the face, but continuing to ignore the two 800-pound gorillas in the room that we do in fact control- federal taxes on gasoline and government regulations which effectively prevent new drilling on land and off the coasts- only serves to prolong our lack of a coherent national energy plan, and it will stall any future economic growth. Houston, we have a problem….