Pro-oil forces here in the US seem to be tying themselves in knots and going around in circles trying to justify their positions on off-shore drilling and further market regulation.
First, for a little while we’ve seen a push by Congress to further regulate oil speculators. However, pro-oil forces claim that speculation isn’t the problem, and that (lack of) supply and demand is the reason for high oil prices.
Their solution? More offshore drilling! However, opponents of off-shore drilling then point out the obvious: off-shore drilling won’t bring any new oil onto the market in 5 or even 10 years, and even then won’t impact gas prices all that much. The time and money we spend on drilling offshore could be better used to research alternative energy sources.
So what are pro-oil forces to do about this? Argue that by merely announcing that we intend to drill, we can lower the price of oil in the futures market, of course! See, we don’t even need to drill for oil to lower prices, as long as we can show that we’re gonna put more oil on the market 10 years from now.
But by arguing this, aren’t Bush and company basically admitting that the price of oil isn’t caused by supply, but instead by speculators after all? And if it’s caused by speculators, isn’t trying to regulate them the more efficient and perhaps more effective way to try to lower oil prices in the first place?
And if prices really are caused by supply instead, then how can just announcing that we’re opening off-shore drilling lower oil prices when no new oil is hitting the market in 5 to 10 years?
I guess speculation can never increase oil prices, but it sure can lower them. Funny how that works.
