On December 23, 2010, WTI crude oil moved over $90 a barrel. The 2011 question is will crude oil price increase over $100 barrel or fall back into the$70 $80 barrel range?
The fact is every $1 increase in crude oil prices reduces the US Gross Domestic Product by an estimated $100 billion. Every one cent increase in gasoline prices lowers disposable income by an estimated $600 million.
US government regulations in the Gulf of Mexico; no drilling off the East and West coasts; increased environmental regulations; restriction on nuclear power plants, limits on coal fired power plants, etc, etc, will increase our energy costs and increase our importation of crude oil.
These federal regulations also will force our domestic oil and gas industries overseas for a massive loss of jobs.
Few bureaucrats understand or appreciate the cost and consequences of massive increased regulations and taxes on our domestic energy industries.
By many indicators the era of cheap electricity, crude oil, natural gas, gasoline, heating oil, diesel, etc. is over.
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Also on Thursday, December 23rd the EPA announced that it will begin regulating power plants and oil refineries in an attempt to stop global warming. The new regulations will seek to cut greenhouse gas emissions by making it more expensive to turn fossil fuels into energy. But the Obama Administration did not stop there. Later in the day, Interior Secretary Ken Salazar announced that the Bureau of Land Management was issuing new rules that would make it harder to develop natural resources on government-owned land. Both of these measures will not only drive up the cost of electricity but will also make us more dependent on foreign sources of energy.