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May 15, 2011

Obama takes Herman Cain’s advice! (well, some of it.)

Stung by public reaction to high oil and gas prices President Obama has announced a new policy of ”Drill Baby, Drill” ramping up U.S. oil production by extending existing leases in the Gulf of Mexico and off Alaska's coast and holding more frequent lease sales in a federal petroleum reserve in Alaska.

Granting leases is only part of the problem, it would not matter if leases were open slather as far as granting them is concerned, the biggest problem seems to be obtaining the necessary permits to do the drilling. These have to be signed off by numerous agencies and get past the whims of the multitude of Czars the President has appointed. There is little on this other than a vague reference to an interagency task force to coordinate etc.

Oddly, the President gives no attribution to Herman Cain, who offered the following advice in answer to Obama’s previous solution of blame the speculators:

This follows a similar statement he made in his column last month:

With all due respect, Mr. President, there is something you could do to ease the pain at the pump. Namely, declare and implement a “drill here drill now” strategy. And remove the ridiculous restrictions on shale oil deposits available out west. The very speculators you are blaming for the run-up in gas prices would quickly retreat if they thought you were serious about an energy independence plan to maximize all of our existing natural resources.
It is doubtful that Obama's announcement is related to Republican bills to expand and speed offshore oil and gas drilling, which are broadly similar to this proposal. The White House has already announced its opposition to them, saying the measures would undercut safety reviews and open environmentally sensitive areas to new drilling.


  1. American oil is much more expensive than imported oil. Shale oil is even more so to extract and do it cleanly.

    The increased demand from third world countries and the weak american dollar are the contributing factors to high oil prices.

    The only way to reduce oil prices and dependence on foreign oil for the US and the west is to go green, however, this is cherem to tunnel vision libertarians.

  2. I would expect US oil to be more expensive given the higher wages and compliance costs US companies have to pay.

    The weaker dollar will contribute to higher prices for imported oil but should have a lesser effect on domestic production. Apart from poor economic policy, the need to import huge quantities of oil, some of which could be produced domestically is contributing to that weakness.

    In view of the last statement it is curious why Obama is anxious to increase production, given he is a fan of all thats green. Maybe he is learning that all of those windmills and solar panels are not living up to expectations, require equivalent baseload generation for all those times when they are not producing and bio-fuels are contributing to high food costs and hunger.