I hope this isn't considered political, but Mr Gingrich is being very foolish.


First, he repeats the idea that speculators are driving up the price of oil. This has been fairly conclusively debunked in the economics community - Paul Krugman did a very good article it in the NYT - but even if, hypothetically (and counterfactually) speculators were driving up the price of oil, they would be doing it because they thought there was good reason to think that prices would be higher (demand would be greater, and supply would be less) in the future. In which case, selling off the strategic reserve would make the price even more volatile, by reducing prices now and making them even higher than they would otherwise be in the future.

Then he states: "We should look for oil where it is." Ah, so that's what the oil companies have been doing wrong all this time, deliberately looking for oil where it isn't. He then makes a comment about shale oil - an enormous potential resource, but one for which the technology needed to extract and refine it is not yet sufficiently efficient as to make the operation commercially viable. Certainly not something that could be done straight away to lower the price of oil.

He is correct that the current prohibition on exploration offshore and in Alaska is driving up the price of oil. However, allowing initial exploration now is not going to do anything in the short term to increase supply, and so would not reduce current prices, which was his stated aim at the start of the talk.

Third, he speaks of encouraging alternative energy as a way of powering vehicles. Which is all well and good, and I agree with his views on nuclear power. But the potential rewards for successfully developing alternate fuels are already enormous, simply due to the market demand for such products, and not because of any encouragement that Mr Gingrich wants Congress to give. We don't need the kind of government plan that he is advocating to develop hydrogen fuel cells, and we certainly don't need the government trying to pick winners as to which technologies will be viable in the future. High fuel prices will automatically provide incentives to develop alternatives. Though, just to repeat, I do very much agree with his views no nuclear power.

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T W Hopper
Member, Presbyterian Reformed Church
Currently between churches since PRC closed here - attending Crossroads Christian Church.
Canberra, Australia.