The oil industry is enjoying record profits as the price for a barrel of oil soars to more than $110. Chevron posted its profit numbers for the first quarter. The numbers were tough to stomach. Chevron reported earnings of $6.2 billion ($3.09 per share -- diluted) for the first quarter 2011, compared with $4.6 billion ($2.27 per share -- diluted) in the 2010 first quarter.
The Chevron press release set off a media blitz vilifying the big oil companies. How can these oil companies be making so much money while the American people are struggling to make ends meet and fill their gas tanks. Americans are making daily decisions on sacrifices they must make to put food on the table and pay their mortgage as the oil companies are making obscene profits.
Be careful where the blame is laid in this situation. The Obama administration has laid the groundwork for this situation and it is now their responsibility to correct it without getting its hands into private industry. The problem can be solved with a simple change in the administration's policies.
If the Obama administration allows the oil companies to drill and relieve this pressure, prices will fall almost immediately on a barrel of oil. The speculators will flee oil in a second once we announce the United States will make it a priority to drill.
The administration is committed to alternative energy. I agree with its aggressive solar and wind energy policies, but it must not destroy the economy to make it a reality. It must allow the oil companies to spend their profits on drilling new wells and developing alternative energy at the same time.
We can solve this immediate issue with the economy by simply being flexible when it comes to our energy policy. Allowing new wells and existing wells to resume operations will send a sign to our enemies and our debt holders that we are committed to doing whatever it takes to correct our economy in the short run. In the long run we must not turn our back on solar and wind energy.
The next time you drive by a gas station and see the price of a gallon of unleaded gas more than $4 a gallon, focus on the root cause of the problem. The Obama administration's refusal to allow oil exploration and bring the United States back to fore front as a leading producer of oil.
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