[Beetle01]

Let's say that tomorrow morning President Obama announced a new energy plan based on the following:

1. The oil reserves in Alaska's ANWR would immediately be opened for exploratory drilling. Upon the completion of exploration leases for those reserves would be auctioned to American oil companies.

2. The oil reserves off the Atlantic and Gulf costs would similarly be explored and lease to American companies - barring objection from the affected states.

3. A commission would be appointed and charged with making recommendations to place federal oil, gas, and coal reserves into production as quickly and as safely as practcable.

4. EPA regulations would revert to those in effect during the Clinton administration, to the extent that such changes would not violate current federal law.

These are changes in policy that Obama could easily make with very little effort.

Do you think that speculators would continue to inflate the cost of gasoline under this scenario?

There are good reasons for speculators to expect future gasoline prices to remain vry high. The right set of government policies would result in an immediate and sharp decline in prices at the pump. All it would take is a sane energy policy and a president who does not pander to environmental wackos and pour billions of taxpayer dollars into "green" alternative energy companies that happen to b very generous donors to his campaigns.

Oh sure there would be an initial drop in prices for a short period. But however, once again the prices are not based on supply/demand. they are artificially inflated and no amount of drilling or refinery building is going to change that.

Of course multiple factors do play into the cost. Speculators and oil future markets are just one, but very key. Since gas prices have been high since the early 2000's, Big Oil has been making record profits........ I mean hmmmm wonder why that is. Couldn't be they reduced refining capacity by almost 1,000,000 barrels a day by shutting down refineries between 1995-2001.

If oil companies were making the same profits they were in the mid 90's what would the cost of gasoline be at the pump?

Lets not even mention during these times when the oil companies were shutting down refining capacity, the big players were buying up all of their competition. The same thing that has happened to the banking industry that has set up the "we can't let them fail banks"

I saw a great graph on how over the past 30 years about 50 major national banks had basically been consolidated into 4 over time.

The same thing has happened to oil companies. Buy up all of the competition, shut down refining, make record profits = we pay 3.50 a gallon, even though in truth supply and demand has not changed so drastically. Even with the shut down of those refineries this country is still able to meet its demand needs for gasoline.