Oil Hysteria

Last week I received a forwarded email:

OPEC sells oil for $136.00 a barrel.
OPEC nations buy U.S. grain at $7.00 a bushel.

Solution: Sell grain for $136.00 a bushel.
Can’t buy it? Tough! Eat your oil!
Ought to go well with a nice thick grilled filet of camel ass !!!

…

Great idea!
$30 a bushel (the same price ratio) for each barrel traded, to oil producing countries would be hard to contest.

To which I replied,

The Organization of the Petroleum Exporting Countries (OPEC) isn’t to blame for rising prices. The blame lies at the feet of increased global demand and our own federal government.

OPEC oil costs just as much as American, Norwegian, or Russian oil. The world is simply burning more oil today than ever before.

This increased consumption is a good thing because it’s directly tied to a rising standard of living, seen most dramatically in the developing world.

However, increased consumption is not solely responsible for the rapid rise in the price of crude oil. Speculators have played a role, but the biggest mover is D.C.

The federal government is responsible for arbitrarily limiting supply. We have vast oil reserves off our coasts, in Alaska, and oil shale in the western states—enough to last for decades.

But instead of drilling for oil at home, consumers are forced to buy oil at greater cost from countries with some of the worst human rights and the environmental records.

The declining value of the dollar has also played an enormous role according to economist Bryan Caplan’s back-of-the-envelope calculation.

If the value of the dollar held steady with the Euro these past six years, the price of gas might only have doubled instead of rising 280%!

Oh, and good luck selling those bushels of grain. The farmers around the globe will be happy to hear American farmers just made foreign grain a little bit more valuable.

If you’d like to see lower prices at the pump, join over 1 million Americans petitioning the government to Drill here. Drill now. So we can Pay less.