Dramatic increases in domestic drilling were offered as the answer to many of our economic problems last summer when gas was approaching $4 per gallon. Even Democrats were forced to recognize the need to open up some offshore drilling, and pressure was building to drill in ANWR in Alaska. Yet Barack Obama is in the process of cutting back on the small increases which were agreed upon.
Now that gas is down below $2 per gallon, drilling is still the answer, and even more so.
Domestic drilling in an economic downturn makes even more sense, because there is no global demand to soak up increased production, so the effect in lowering prices should be more dramatic than in strong global economic times. The low prices and weak global economy also make it difficult for OPEC countries to cut production because so many OPEC countries rely on oil revenue almost entirely; it is not feasible for these countries to cut production unless the cuts increase oil prices, which will not happen in this global economic environment.
Lowered oil prices provide a direct and immediate financial stimulus for American families without any cost to the U.S. Treasury. The most obvious benefit of increased domestic oil production is lowered gas prices, which saves families hundreds of dollars a month. Lowering gas prices will do more for American families than the $1000 tax “rebate” checks Obama wants to send to people who don’t pay taxes, putting money in the pockets of lower income families without turning almost half the population into welfare recipients.
Lowered oil prices also lower prices of goods that require shipping by truck, such as food, and products based on oil, such as asphalt for roads. Businesses that rely on car travel or equipment that uses gas also benefit. From the food shopper to the construction worker to the taxi driver, Americans at every level — but particularly the middle class — will benefit from increased domestic production. The increased economic activity will create permanent jobs, not just short term make-work jobs which have no economic justification.
Domestic drilling, and the lowering of oil prices, also helps in foreign policy. The regimes in Venezuela and Iran cannot meet their budgets at the current oil prices, and even lower prices at a minimum will hamper these countries from exporting their anti-Americanism. Russia also is highly dependent on oil revenue, and lower oil prices may inhibit Vladimir Putin from his increasingly hostile path. It is very possible that an all out push to lower oil prices will bring down hostile regimes without firing a shot.
Increased domestic drilling is not the only answer, but it is an important part of the answer. And it beats destroying the dollar and socializing our economy through trillions of dollars in new government spending programs.