Augusta Chronicle Editorial Staff
The collapse in oil prices has been the silver lining in the scary economic crisis the industrialized democracies find themselves in.
In July, oil peaked at $147 a barrel, and in some parts of the United States pump prices soared to $5 a gallon. Earlier this week a barrel of oil on the global market had tumbled to $67 and pump prices sunk below $2.68 a gallon at some CSRA stations -- and $2.30 a gallon at other locales across the nation.
Overall, oil's steep decline equates to a $125 billion tax cut for Americans. Talk about a stimulus package!
But don't count on oil price relief to last much longer. The Organization of Petroleum Exporting Countries is meeting in Vienna today to plan how much to cut production. Some OPEC ministers are pushing for 2 million barrels a day in cutbacks, an amount that not only would jack up pump prices again, but would likely deepen and lengthen what appears to be a global recession.
There's no reason why the industrialized democracies, comprised of the largest and wealthiest nations in the world, should be bullied by a handful of petrotyrant states, most of whom hate our guts.
It's like letting the tiny cartel tail wag the large, powerful, industrial dog.
Plummeting oil prices were due, in part, to market speculation excess, but mostly to the economic slowdown triggered by the credit squeeze and collapse of equities. When slowed economic activity resulted in reduced oil consumption, OPEC unexpectedly found it had overproduced.
Now the cartel plans to boost prices again by cutting back on production. Well, there is a way to bring down oil prices even more, no matter what production quotas OPEC sets. Start by continuing the conservation that we've been practicing since oil prices hit their peak. Don't drive more than necessary; buy fuel-efficient cars, not gas guzzlers.
There's more.
Newt Gingrich's new documentary, We Have the Power, calls for "a World War II mentality of do it all, do it now" by tapping all the abundant energy resources available in the United States and other advanced free world nations.
There's a vast amount of oil and natural gas in the Outer Continental Shelf and Alaska's Arctic National Wildlife Refuge.
Other vital energy sources that could soon become available include clean coal and nuclear technologies, wind power, oil shale, bio-fuels and, of course, hydrogen fuel cells being pioneered in Aiken.
There is no reason why America's energy needs should continue to be at the mercy of a handful of radical oil-producing regimes, including Iran and Venezuela, that would like nothing more than to destroy our economy and our global leadership.
OPEC's stranglehold could be broken by something much bigger and stronger than it, if the industrial democracies cooperated in fighting back. Call it the Organization of Oil Consuming Nations?
It's time for the big dog to wag its own tail.
