It is getting tougher for America to get its hands on oil. Not only is OPEC negotiating with the Chinese to secure more orders to China as well as planning to cut its output, but also, our very own government is putting the lid on domestic drilling.
Yesterday, the Senate rejected the notion of drilling in the Alaska National Wildlife Refuge (ANWR), making it that much harder for the nation to ensure a reliable energy supply.
Senator Ted Stevens, R-Alaska, has been fighting hard for years for the chance to open the approximately 10 billion barrels of crude that lie in the area. Stevens and the majority of Alaskans who are in favor of the drilling are going to have to keep fighting. With all the talk recently about "civil liberties", the notion of limited federal authority and State's Rights seems to be lost on this Congress.
Even though oil drillers insist they can pull the oil from the ground without major disruptions to the environment and its wildlife, conservationists are committed to keeping the area closed.
Of course, Alaskans will continue to fight for the right to drill their own land. With reserves at North Slope oil fields get smaller everyday, it is no wonder they are looking to expand. The state needs the money from oil sales to keep it going.
Experts believe the state will receive roughly 75% of its general revenues from oil through 2011. If ANWR was opened to drilling, that figure would get even higher.
Now, I am as fond of low oil prices as anybody, but opening ANWR right now is not a good idea. We’ve got plenty of oil flowing into the country, and, who knows, we may need that land to build condos for all those environmentalists to live in some day since the area is so "pristine".
This country has so much oil in its inventories, OPEC feels that it is necessary to cut its production rate for next year’s second quarter. Just in time, too. Prices were starting to drop.
Once the high-demand period of the northern hemisphere’s winter is over, OPEC will lower its official quota. Earlier this month, OPEC agreed to keep its Q1 quota at current production levels of 28 million barrels per day.
Fortunately, the news of a production cut has not caught the energy market off guard. As I write, a barrel of crude is trading for US$57.75, US$0.81 cheaper than yesterday’s closing price.
Be sure to call you Senators and thank them for making us more dependent on foreign oil.
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