People seem to think that when the President says we need to reduce our dependence on foreign oil, that he’s saying domestic oil will be cheaper. That’s not necessarily the case. And, in my opinion, I believe that will lead to higher oil prices in the U.S.

With U.S. oil companies facing a move toward cleaner fuel sources for cars, the domestic oil industry is positioning itself to be the sole supplier of oil in the U.S.

Consider what will happen if no energy policy changes are made.

Auto makers, spurred both by consumer interest and by government cash, have been increasing the number of high fuel efficiency and hybrid vehicles over the last few years. As gas prices climb, more people are purchasing these cars as a way to save money on gasoline, contribute to reducing pollution, or to tell the oil industry to go pump themselves.

So, as people move toward more fuel-efficient cars, the demand for gasoline will decrease. This decreasing demand for gasoline will lead to a slackening of the pressure on OPEC to produce enough oil to satisfy the growing thirst for oil from India and China. It could even lead to a short-term surplus of supply, which would lead to a decrease in prices for oil worldwide.

Since the domestic oil industry doesn’t contribute much to the worldwide market, they cannot (or will not) absorb reductions in prices for the oil that they produce. Any reduction in price-per-barrel or number of barrels sold would lead to their stock prices turning downward and investors pulling their money out of domestic oil in favor of other investments that are doing well. This would further damage the domestic companies, who would then have to make cuts in personnel, top executive salaries, investments in infrastructure and development, and overall business expenditures.

The domestic oil companies have seen the writing on the wall for some time now as cars become cleaner and hybrid technologies have taken off. So, they got together and determined that they must continue to sell their oil at an increasing price-per-barrel. And how would they do that in the scenario that I just described? They can’t. So, what will they do?

They get the American government to commit to turning the U.S. oil supply into a monopoly. They set in motion a strategy to cut off foreign sources of oil to position themselves as the sole providers of oil in the U.S. for heating and gasoline.

The strategy that has been set into motion is this:

In order to maintain and increase earnings and profits at domestic oil companies, the U.S. government will begin implementing laws to reduce the allowed amount of foreign oil purchased and brought into the U.S. Domestic oil companies will then begin a strategy of slowly increasing gasoline and heating oil prices. They will blame the price increases on the continued high demand for oil in the U.S. and justify it by continually proclaiming that any additional money gained from oil sales will be used to bolster the domestic oil drilling and pipeline infrastructure, which must be revamped because of changing U.S. oil strategy.

How will they get away with it? Won’t Congress pursue them for wrongdoing?

No. The Republicans have their hands deep in big oil’s pockets. They will get even richer off of the deal. They will declare that national security is at stake and we must be independent of foreign oil.

So the Democrats must surely come to the rescue, right? No.

They have sold their souls to big oil because they believe that the ends will justify the means. Most of the left-most liberals want to see the internal combustion engine go the way of the dinosaurs. John Kerry was quoted as saying that he would love to see gasoline prices go up to $5.00 per gallon so people would stop buying SUVs. A lot of Democrats are in the same boat. They’ll look the other way while big oil gets bigger, and, if confronted, will say that people are moving away from gasoline. Sure, oil execs are getting rich off of sky-high oil prices, but it’s leading to people moving toward alternative energy sources. So, the ends justify the means.

So, while Republicans roll in oily money, Democrats are cheering on the end of the fossil fuel era – and may even push a little themselves to see it finally go away.

So, while I welcome cleaner vehicles and alternative sources of energy, I dread seeing the oil execs get rich on the backs of those too poor to keep up with galloping energy technology and prices. Those people will be trampled under the oily heels of progress toward a cleaner Earth.

Just my 2 cents.

— Mark