People are jumping for joy because of the happy headlines of $100/barrel Crude Oil. Despite the present relief from inflation, the economic truth states that the continued drop in oil prices negatively reflects the economy. Earlier this year, when oil prices were at their peak, people blamed supply interruptions, speculation and the Middle East. Now that prices are falling, many are questioning why. Simply put, demand has decreased because of the past spike in prices. People are driving less and overall energy consumption is down. However, one might wonder why prices are continuing to fall when we are in the perfect season for energy consumption. The winter weather spurs demand for heating oil, but due to climate change, resdients demand less. Maybe prices are falling because there is more production. Recently, President Bush lifted the executive ban on drilling in previous government locked land such as the Western shale and other offshore locations, thus making speculation a reason for lower oil prices. Bush is now pushing Congress to allow drilling in certain restricted areas for longterm energy price stability. Going back to the source of the problem, lower demand is a major contribution to the price drop. Its interesting to see the relations between the overall economy and the commodities market which reflects our current position. During the peak of inflation when markets were suffering, commodities (especially oil) were rising, now oil is experiencing a serious fall. As I was observing the economy play out from the Spring of 2008 to present I had a basic economic view: commodity prices
soared which caused businesses to increase their prices to make up for production costs (inflation- Spring). With inflation on the rise, consumers used less to save the little money they had from jobs from the same corporations that had to raise prices and could not afford workers. At that point I paniced because I knew consumers will demand less as inflation continued... but if they continue to purchase and use less, businesses are not going to have enough income to cover the high production costs. We see this happening now and to increase demand businesses must lower their prices but cant afford to. With the convinient drop in commodity prices, business are able to do so. I now realize that the panic I had of a depression can be solved. The time is now to act and we cannot afford to miss this moment to rebound our economy and come back stronger. I would hate to see the nation get sidetrack from the gift of low commodity prices by using more energy and acting irresponsibly; all to fall back into the same hole where gas prices go back up and national panic to return. The focus should be on energy independance by using domestic resources, renewable energy and maintaining low energy consumption. Lastly, we cannot forget the fact that oil supply can and will run low in the future and a domestic solution is key. This means government and commercial involvement in renewable energy by using the nations wind and solar co
rridors, domestic and offshore drilling (especially in ANWR, a small area in the coast of Northeast Alaska which caught national attention from several politicians including Governor Palin pushing Congress to open the site for drilling), nuclear, clean coal and natural gas (my favorite.. cheap, clean, and abundant). I just dont want us to get too excited for the sudden decrease in prices. We need to stay focus and keep prices reasonable. President-elect Obama needsto appoint the right person for Energy Secretary of the DOE (a position that I will like to see filled by Governor Palin, but a more realistic pick considering current conditions will be tough). The wrong way of thinking and acting got us into the mess of inflation, to make this same mistake when prices are falling is simply un-American. History shows that whenever we were faced with a crisis, we learned our mistakes and came back strong. The vision of an energy independent nation needs to stay clear and an effort from everyone is needed.
People are jumping for joy because of the happy headlines of $100/barrel Crude Oil. Despite the present relief from inflation, the economic truth states that the continued drop in oil prices negatively reflects the economy. Earlier this year, when oil prices were at their peak, people blamed supply interruptions, speculation and the Middle East. Now that prices are falling, many are questioning why. Simply put, demand has decreased because of the past spike in prices. People are driving less and overall energy consumption is down. However, one might wonder why prices are continuing to fall when we are in the perfect season for energy consumption. The winter weather spurs demand for heating oil, but due to climate change, resdients demand less. Maybe prices are falling because there is more production. Recently, President Bush lifted the executive ban on drilling in previous government locked land such as the Western shale and other offshore locations, thus making speculation a reason for lower oil prices. Bush is now pushing Congress to allow drilling in certain restricted areas for longterm energy price stability. Going back to the source of the problem, lower demand is a major contribution to the price drop. Its interesting to see the relations between the overall economy and the commodities market which reflects our current position. During the peak of inflation when markets were suffering, commodities (especially oil) were rising, now oil is experiencing a serious fall. As I was observing the economy play out from the Spring of 2008 to present I had a basic economic view: commodity prices 
soared which caused businesses to increase their prices to make up for production costs (inflation- Spring). With inflation on the rise, consumers used less to save the little money they had from jobs from the same corporations that had to raise prices and could not afford workers. At that point I paniced because I knew consumers will demand less as inflation continued... but if they continue to purchase and use less, businesses are not going to have enough income to cover the high production costs. We see this happening now and to increase demand businesses must lower their prices but cant afford to. With the convinient drop in commodity prices, business are able to do so. I now realize that the panic I had of a depression can be solved. The time is now to act and we cannot afford to miss this moment to rebound our economy and come back stronger. I would hate to see the nation get sidetrack from the gift of low commodity prices by using more energy and acting irresponsibly; all to fall back into the same hole where gas prices go back up and national panic to return. The focus should be on energy independance by using domestic resources, renewable energy and maintaining low energy consumption. Lastly, we cannot forget the fact that oil supply can and will run low in the future and a domestic solution is key. This means government and commercial involvement in renewable energy by using the nations wind and solar co
rridors, domestic and offshore drilling (especially in ANWR, a small area in the coast of Northeast Alaska which caught national attention from several politicians including Governor Palin pushing Congress to open the site for drilling), nuclear, clean coal and natural gas (my favorite.. cheap, clean, and abundant). I just dont want us to get too excited for the sudden decrease in prices. We need to stay focus and keep prices reasonable. President-elect Obama needsto appoint the right person for Energy Secretary of the DOE (a position that I will like to see filled by Governor Palin, but a more realistic pick considering current conditions will be tough). The wrong way of thinking and acting got us into the mess of inflation, to make this same mistake when prices are falling is simply un-American. History shows that whenever we were faced with a crisis, we learned our mistakes and came back strong. The vision of an energy independent nation needs to stay clear and an effort from everyone is needed.
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