Gordon Brown and Nicolas Sarkozy want more Government involvement to control oil prices, when it is precisely Government involvement that has caused the erratic oil price fluctuations they lament.  In their

Wall Street Journal July 8, 2009 editorial, Oil Prices Need Government Supervision, two truths emerge; first, “the surge in prices last year gravely damaged the global economy and contributed to the downturn”, and second, that oil prices are “seemingly defying the accepted rules of economics”.  The extreme intrusion of government into the energy markets since the 1970s, vis-a-vis overregulation and imposition of artificial shortages through misguided energy policy, caused these occurrences.  Cheap energy is essential for sustained economic growth and high-priced energy stifles it as all recent U.S. recessions prove, since each was preceded by rapidly rising energy prices.  After more than seventy years of fairly stable petroleum prices, the U.S. Government, for various and dubious reasons, began implementing policies that induced instability to price.  These policies have included price controls, prohibiting exploration in the most oil rich domestic lands and prohibiting proliferation of the most efficient and effective energy substitutes. 

Analysis shows that most U.S oil reserves and 40% of methane gas lie beneath lands deemed off limits, and each new promising discovery typically brings to the fore an eager congressman to insert yet another line item in a bill to prevent access to those resources in order to protect a sage grouse, to chase a global warming boogie man or some other reckless reason.  It is the ignorant weaving of non-economic considerations into energy strategy, as proposed by politicians like Mr. Brown and Mr. Sarkozy, that undermines the accepted rules of economics. 

Accordingly, the U.S. as the biggest consumer of oil, has been producing considerably less each year, causing prices to be extremely elastic to real and perceived global demand.  In the 1980s when oil was $30 per barrel, the U.S. had 4500 to 5000 active oil rigs and 63% were engaged in exploration.  By 2006 the number of active rigs dropped to approximately 1500 with only 18% engaged in exploration causing the price to exceed $65 per barrel.  In the face of incredible global economic growth and accompanying demand for oil in 2007, a Democrat majority in both houses of congress, with the help of a few Republican accomplices, refused to permit additional exploration causing oil prices to soar.  That stubbornness facilitated the Exxon-Mobil profits they purport to abhor, enabled speculation to rule the day and lit the match for our current recession.  Coincidently, that congressional majority included presidential candidate Obama who expressed his approval of $4.00 per gallon gasoline, boasted he would bankrupt the coal industry and drive energy prices up if elected—the same President Obama who complains of “inheriting” the current economic conditions when it is he and his party that bear responsibility for creating them.    

Our nation’s economic and national security depend on a logical and realistic national energy plan based on sound science and technology that does not rely on taxpayer subsidies.  This can only be accomplished with unrestricted oil and gas exploration and construction of significantly more nuclear facilities.  The indisputable scientific facts are that the climate has been cooling for over ten years, we had more arctic sea ice this year over last, and the polar bear population has doubled the past thirty years, providing the impetus to disregard the unproven crisis of Global Warming peddled by pseudo science.  Mr. Brown and Mr. Sarkowzy would have us travel further down a failed path that not only ignores the traditional economic laws of supply and demand regarding energy, but leads to certain economic suicide.

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