Monday, May 26, 2008

Our Congressional Idiots

Surprise, Surprise: Congress Doesn't Understand $135 Oil
When it comes to high-priced oil, Congress just doesn't get it.
As I said on Friday, Congress just passed a US$57 billion alternative energy plan - that promises to do little but make the headlines.
Meanwhile, in another chamber of Congress, executives of big-oil firms were called on the carpet to account for recent sky-rocketing crude oil prices.
Congress wants to know why crude oil is soaring past US$135 a barrel - double the price of last year! Hmm... more demand than supply maybe?
Of course Congress just doesn't get it! As the CEO of ConocoPhillips correctly points out, "The fundamental laws of supply and demand are at work." We are getting squeezed by oil exporting nations that are "managing demand for their own interest," and severely restricted access to energy reserves both at home and abroad.
Today, the International Energy Agency said that a major supply crunch is looming unless the world's oil majors can ratchet up production by 12.5 million barrels a day within the next seven years. Uh... don't count on it.
Decades of underinvestment in new energy exploration and development, and a seismic shift in who controls access to new energy deposits means sustainable high prices for years to come. Fossil fuels are a dead-end for American big-oil firms - it's time to embrace an alternative energy future!

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