Reacting to High Oil Prices

Since we've seen the instability in Libya, one of the world's top oil producers, the price per barrel of crude has spiked, and is still going up. High oil prices negatively affects every facet of this economy and will be the cause of higher prices not only for gasoline, but for food, airfare, hotel stays and restaurants. Americans therefore, will have to dig deeper into their pockets and the economy will further sink.

What has the federal government done? Well, nothing really. There are reports they want to tap into the Strategic Petroleum Reserve. In the long run, this would be a mistake, as we do not have a "supply" problem that we did in the 1970s. With Saudi Arabia stating they will make up any difference lost by Libya, tapping into the SPRs is wasteful, short term and will have little effect on the price at the pump. There are other options the Federal Government should explore, yet with the agenda and ideology of those currently in government, they won't be likely:

- DRILL: With the BP leak in the Gulf of Mexico, the United States has suspended offshore drilling and is fighting to keep those wells offline. If the United States produces its own oil, putting that product on the market will not only cut prices, but it make the importation of oil less necessary, and we can be responsible for our own economic growth, as oil fuels (pardon the pun) this economy. With additional drilling done in ANWR, the restoration of offshore drilling, as well as shale extraction, speculators who often drive the price up will see that more supply will be coming online in years to come, hence the prices will fall. This is exactly what happened when George W. Bush called for the end of the offshore drilling ban and as a result, we had low per barrel prices well into 2009. Environmentalists may disagree, but the Obama Administration must prioritize.

- GAS TAX HOLIDAY: The current federal gas tax is at 18.4 cents per gallon. States could also opt to do this, as each state has it's own tax added on to the federal gas tax. Some states' taxes and fees can amount to over 60 cents per gallon! A gas tax holiday will be of significant saving to the budgets of American families and businesses, while at the same time, act as a true stimulus to the economy.

- NEW TECHNOLOGIES: While we should seek alternative sources, it is unrealistic to stop using oil while these sources have not been fully developed. We must have an "all of the above" mentality, in the interest of the American economy. One specific source we should explore is oil shale. These reserves are massive and the extraction technologies continue to advance. Furthermore, the majority of these reserves are on federal land, so the United States would be wise to work with private companies to see these reserves can get to the market, in the long run, benefiting the US Economy.

These three solutions will allow the United States to direct its energy policy in the best interest of the economy and assist America in helping to pull out of its economic funk. If the government continues down this current road, it not only gives them an opening to propose and advance legislation that may be individually intrusive, it may also bring a return to the economic stifling of the late 1970s, brought about by the government's reaction to the energy crisis.