Perception: Oil companies are manipulating prices and President Bush won’t do anything about it.
Economic Reality: Since demand is exceeding supply, prices are rising. Oil companies profits increase when they sell more of their product. See the column by Newsweek economist Robert Samuelson – excerpt below:
“It may surprise Americans to discover that the United States is the third-largest oil producer, behind Saudi Arabia and Russia. We could be producing more, but Congress has put large areas of potential supply off-limits. These include the Atlantic and Pacific coasts and parts of Alaska and the Gulf of Mexico. By government estimates, these areas may contain 25-30 billion barrels of oil (against about 30 billion of proven U.S. reserves today) and 80 trillion cubic feet or more of natural gas (compared with about 200 tcf of proven reserves).
What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity. Americans favor both “energy independence” and cheap fuel. They deplore imports — who wants to pay foreigners? — but oppose more production in the United States. Got it?”
I was reading the column thinking how depressing this must be for an oil conspiracist to read about. Which naturally raises the question; Can conspiracists ever be dissuaded?