$142 per barrel. You know, between the speculators, our "friends" in oil producing countries saying that prices are going to keep going up, Venezuelan and Nigerian production not at full capacity due to domestic issues, the Bush administration dragging its feet on energy production, Congress opposing offshore drilling and the Fed stubbornly keeping interest rates too low, I think it won't be too long before $200 oil is the new base price. So with all this fear that the free market is not helping the common U.S. consumer as oil prices skyrocket, a lot of people, sadly not just the ones in Congress, are starting to wonder about nationalizing oil reserves. The argument being that countries like Venezuela, Iran, Saudi Arabia and Kuwait sell their refined products for dirt cheap compared to the U.S., where oil is bought on an open market. People see other countries where people pay $0.25 per gallon, and wonder, hey, why not us too? Well, Jay Bookman over at the Atlanta Journal-Constitution has a very good reason why not. He says, "If we’re selling American oil to Americans at $60 a barrel, while the world price is $140 a barrel, some bad things happen. We’d all want to avoid that $140 oil and buy a lot of that $60 oil, putting great pressure on our domestic reserves and draining them much more quickly. It would be short-term gain and long-term pain, and we’ve had too much of that already." Bookman adds that it would send the false signal to consumers, who would increase their consumption habits and in turn rapidly deplete reserves. Which is the point. I know you don't like paying $4 per gallon to fill up your car. I don't like it either. But the fact is, high oil prices serves a purpose: they reduce our energy consumption and make us prioritize our trips. Which is something that we should ideally do anyway, but somehow forget to do when gasoline is cheap. When was the last time you saw this much of an effort to find alternative energy sources? When the price of oil and our dependence on foreign suppliers was a legitimate Presidential campaign issue? When nuclear power was talked about in the mainstream press in a non-threatening way? When a car that gets 45 miles per gallon is selling like hotcakes? –Stephen Payne, Editor, Oil and Gas Investor This Week; www.OilandGasInvestor.com; spayne@hartenergy.com
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