Crude at Less Than $38/Barrel

A barrel of crude is at a little less than $38 today. At that kind of price, investing in more offshore drilling and oil sands is not really practical. When oil was at a record $147 a barrel last July, it made sense to heavily invest in r&d for additional oil sources.

In related news, House Speaker Nancy Pelosi issued the following statement yesterday about the Obama administration’s drilling plan:

“The new Administration is stopping [the Bush administration's] headlong rush to open new offshore areas of drilling, calling for a thorough review, with much greater public participation. And Secretary Salazar is wisely initiating a review of the potential for offshore renewable energy, and moving forward with long-stalled rules to ensure that offshore renewable energy projects can proceed in an environmentally-responsible manner.

“We cannot drill our way to energy independence. But by harnessing all of our domestic energy resources, and aggressively pursuing new technology to unleash them, we move a giant step closer toward energy independence.”

Let’s just hope that people don’t go back to their old habits when it comes to oil usage–otherwise we’ll be right back in the same boat if a barrel of oil should surge in price again and gas prices rise dramatically. Because the price of oil doesn’t really lend itself to heavy oil drilling (and the Obama administration wants to move away from that plan), we don’t want to end up with shortages if people overuse gas while the prices are low.