Oil crisis in the United States

oil-crisis

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For the last three year NAFAPAC has published several articles addressing the need for a Comprehensive Federal Energy Policy that will liberate the United States from the Middle East oil dependency. Today, our dependency on foreign oil is even more critical than ever. The civil unrest in countries in the Middle East since the beginning of 2011 have created uncertainties with the supplies of oil for Europe and United States, and there are greater concerns about the long term U.S. economic recovery. The intentions of Iran to develop a nuclear bombs and fears by Israel of a nuclear attack by Iran are creating more instability in that part of the world. There is no doubt that Iran is determined to exterminate Israel and a war between the two countries can result in the blockade of the Strait of Hormuz disrupting the flow of oil tankers to the Western Hemisphere and European countries. This potential conflict is already affecting the cost of oil in the world market and in the United States. When are we going to deal with our oil independence in the United States?

At the present time, the price of a barrel of oil varies between $100 to $110 and the average price of regular gasoline grade in the United States is near $3.90 per gallon and higher in many parts of the country, and going up each day. Many economists and oil analysts are predicting that the price of gasoline will reach $5.00 per gallon by summer. Many companies depending on transportation are being affected as well by the high cost of fuel and it may force them to layoff employees by summer to survive. The high cost of gasoline and food are also creating a hidden inflation for every family and our economic recovery is in great danger. Just ask a housewife if her grocery budget of 6 months ago will be enough to cover the cost of groceries today. The bottom line is that, drastic steps must be taken by our Federal government to prevent another economic recession caused by the high gasoline and food prices, and more unemployment.

We have seen administration after administration, and Congress after Congress since the 70’s talking about the oil independence whenever there is an oil crisis in the Middle East, without implementing comprehensive energy policy for the future. Every time we elect a new president, he comes out with his own agenda on how to solve the energy problems and the “oil experts” in the U.S. Senate and U.S. House of Representatives schedule hearings and more hearings without reaching an agreement on how to solve the oil problems in the United States. There is no vision!

Americans are getting tired of the rhetoric and no action! President Obama now claims that the gasoline consumption in the United States is down under his administration. However, this is misleading information since there are over 12 Million unemployed Americans staying home and cutting down on driving and many companies are cutting down on driving as well to deal with the slowdown. President Obama also claims that oil production is up in the United States; however, increases in oil production are up only on private land and substantially down in public land as a result of more regulations. Records indicate that oil exploration in public land is down by 40%.

This administration also wants to take credit for increases in oil production in private land but the fact is that these increases are the result of policies initiated by the previous administration and gone through several steps of permitting application, federal approvals, exploration, deliveries to oil refineries, oil refining process into gasoline and distribution to gas stations which may take 5 years or longer before reaching the consumer. It is obvious that our leaders in Washington fail to understand that any decision made today will not see good results for several years down the road. Recent polls indicate that 61% of Americans disapprove the way our President is handling the gasoline prices. Other polls indicate that about 70% of Americans feel that this administration is doing very little to deal with the high gasoline prices and it has no clear solution on how to handle the problem. Again, there is no vision!

The most recent energy related controversy is the Keystone pipe line. The Keystone Pipeline System will be used to transport synthetic crude oil from the Athabasca Oil Sands in northeastern Alberta, Canada to multiple destinations in the United States, including refineries in Illinois, oil distribution hub in Oklahoma, and oil refineries along the Gulf Coast of Texas. This pipeline will bring millions of gallons of synthetic crude oil in the U. S. Market and it is estimated that the construction of this pipeline will generated up to 20,000 jobs and $7 billion in investments to stimulate the US economy. However, the Keystone pipeline has become a political ‘hot issue” after the President postponed the construction of this pipeline until further environmental studies are done. Many feel that this is a delaying tactic by this administration to please their environmental supporters in an election year. Many construction labor unions and members of Congress are in favor of building this pipeline to reduce the dependency on foreign oil and create jobs.

Our leaders in Washington ignore the basic economic principle of Supply and Demand. That is, the more supply of a product, the lower the prices to the consumer. Increasing oil drilling and supplies within the United States can reduce the cost of gasoline. This approach will liberate the United States from the dependency on the Middle East suppliers and price manipulation by OPEC and speculators due to political unrest in the Middle East. Again, there is no vision!

Other factors impacting the high gasoline prices in the United States are the regulations imposed by the Environmental Protection Agency (EPA) and a moratorium on the exploration of oil in our territorial waters and public land. These regulations and the moratorium are hurting our economy. The Energy Department is also pushing for a “Green Policy” and it has approved loans to Solyndra and others which have proven to be failures and waste of taxpayers’ money.

We will be naive thinking that some other source of energy will totally replace the need for oil in the next 100 years. There is another reality with the increasing oil demand by China, India, South Korea and other emerging economies which are also creating a shortage of oil in the world market. United States needs to expand the exploration of oil in its territorial waters and public land. Our energy independence must be based on a combinations of more oil explorations, more oil production, more ethanol production, more clean coal, more natural gas applications, more nuclear energy, more supplemental sources of energy as solar and windmills, more research and development on the combustible engine efficiency for automobiles and less regulations.

The bottom line is that Americans are frustrated with our leaders in Washington for their lack of action to reduce the cost of gasoline which is already affecting the budget of every family in the country. In March 2009, the price of a gallon of gasoline was $1.84 and now $3.90 per gallon and rising. Are you better off now than 4 years ago?

All things considered, there is little chance for any mayor energy policy development or compromise in Washington on this election year and the trend by the leaders in Washington is to blame the oil companies, the oil speculators and others for their failure to find solutions. In a recent speech, our President told the nation that the energy policies implemented by his administration are the right policies; but the high prices at the gasoline pumps are demonstrating the opposite. We are living in times of misleading information and plenty of demagoguery by our political leaders.

We are committed to speak out to educate the consumers with facts and encourage our leaders in Washington to find solutions to our energy crisis, protect the national security of this nation and bring prosperity to every American in “One Nation under God.” Proverbs 16:3 tells us, “Commit to the Lord whatever you do, and your plans will succeed.” God bless you all!

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