Oil Prices Dictate Economic Recovery

As Rev. Wright pointed out to his congregation, 'Obama chickens have come home to roost' or something close to that. With oil going over $100 a barrel and headed even higher, it seems Obama's interior domestic terrorist, Ken Salazar, sees more drilling for oil, gas or coal as unnecessary.

His new plan for this year, and next, is no new drilling permits, and as of his latest move to shut down one of the largest coal mining operation in America, as it doesn't meet the new standard for energy production that the mining industry just met two years ago, just approved this year, we will see a dramatic decline in economic recovery.

If you believe this doesn't make sense, especially given our current situation with oil prices headed to $150 or more, you are among the majority. Worse, being in the majority with the Obama administration really doesn't matter, it's what he has determined to be important that matters.

All considerations for an American recovery seem to depend on one man's agenda. This isn't what the founders had in mind for the America experience.

Mideast Unrest Is Not the Only Cause of High Oil, Gas Prices
Source: H. Sterling Burnett, "Roadblock on Domestic Oil Production Even More Costly Now," National Center for Policy Analysis, February 22, 2011.

The ongoing turmoil throughout the Middle East highlights the continuing and pervasive vulnerability of the U.S. economy to oil price instability, yet the Obama administration continues to thwart any efforts to increase domestic oil production, according to H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.

Overdependence on supplies of oil from what are now increasingly unstable regions of the world throw into stark relief the need to develop our own domestic reserves of oil.

An additional 1 million to 2 million barrels a day in increased U.S. oil production would have an inordinate impact on oil prices beyond that expected from the additional amount of oil, because oil prices are driven, in part, by fear of uncertainty of future supply, says Burnett.

Burnett points out:
This risk premium would be reduced if the United States brought more oil to the market; since oil traders could count on the oil being delivered, they would not fear supply disruption from political turmoil or conflict.

Since the oil production would be developed privately for profit, the U.S. oil would not be used as a political tool and profits would be reinvested in improved technology and new supply development rather than to pay off political constituencies while the capital equipment and production declines (as occurs in Venezuela and Mexico, for example).

The need to remove unwarranted roadblocks to increased domestic production would also improve the continuing recession and overall malaise in the U.S. economy, Burnett points out.