Black gold not flowing so quickly

Sen. Charles Schumer (D-N.Y.) held a hearing this morning focusing on the effects of high oil prices and the nations economy before the Joint Economic Committee. Schumer and the other democrats on the committee lambasted the Bush Administration for what they said was an inability to “lesson our dependence on foreign oil,” said Schumer.

Republicans on the committee though charged that it has been democrats who deserve much of the blame for high oil prices. Specifically, Sen. Bob Bennett (R-Utah.) placed blame on democrats for their resistance to supporting drilling in Arctic National Wildlife Refuge [ANWR]. Directing his remarks towards Sen. Schumer, Bennett said “you made reference to ANWR and said it will take ten years and to quote that great economist Jay Leno “that’s what democrats said ten years ago” when they refused to agree to open ANWR.”

But much of the time was spent listening to the committees witnesses which included Dr. Daniel Yergin from Cambridge Energy Research Associates. According to Yergin, approximately 60 percent of our energy comes from oil and gasoline and one reason why the price of oil has risen 70 percent has been a shortage of the overall supply of oil itself. “There’s been a slow response of supply; why? One is the issue of access around the world, secondly is uncertainty about investment fiscal and regulatory regimes and thirdly a shortage of equipment and people,” said Yergin.

Yergin also attributed the shaky economic oil markets to the psychology of its consumers. “I’m really struck by this kind of pessimism about future supply,” said Yergin, “you have to have trust in the market.”

If anyone needed any affirmation though that oil would play an important issue in this falls election Sen. Amy Klobuchar (D-Minn.) told the committee “it’s what my constituents are all talking about.”