Surging oil prices resultant from unrest in the Middle East have been leading many economists to predict an economic double dip as oil makes up a growing percentage of consumer spending. Today, in a first step to separate the U.S. economy from the conflict-ridden Middle East, President Obama outlined a plan to reduce U.S. imports of foreign oil by one-third over the next decade.
"In an economy that relies so heavily on oil, rising prices at the pump affect everybody," Obama told a student audience at Georgetown University. "Workers, farmers, truck drivers, restaurant owners ... businesses see rising prices at the pump hurt their bottom line. Families feel pinched when they fill up their tank."
Where last year, a speech about oil from the President would likely be wrought with reference to green energy, today’s speech was much more in line with points on the Republican agenda. Instead, Obama encourage domestic oil companies to "take advantage of the opportunities they already have," mentioning that the government should help move that progress along.
"Right now, the industry holds tens of millions of acres of leases where it's not producing a drop, sitting on supplies of American energy just waiting to be tapped," Obama said. "That’s why part of our plan is to provide new and better incentives that promote rapid, responsible development of these resources. We’re also exploring and assessing new frontiers for oil and gas development from Alaska to the Mid- and South Atlantic. Because producing more oil in America can help lower oil prices, create jobs and enhance our energy security."
Depending on how quickly large scale production and shipping begins in the wells, economic worries over the upcoming summer months, when gas prices are predicted to reach $5 a gallon may no longer be relevant.
The benefits of this decision will be seen not only in the job market, the pockets of families and the expenditure sheets of big business but also on the stock market. U.S. oil and gas companies currently trading are bound to push up as domestic drilling takes off.
The President, amid encouragement of expanded domestic exploration and drilling promoted the making of more electric cars by 2015. Already, in the hours between Obama’s speech and market close natural gas is higher, led by Westport Innovations (NASDAQ: WPRT), a maker of natural gas engines. Westport was up 13% for the day on Wednesday. The same can be said for Clean Energy Fuels (NASDAQ: CLNE) which climbed 9% and Fuel Systems solutions which saw a 7% gain.
Oil companies by comparison were not as high, though Halliburton (NYSE: HAL), Diamond Offshore (NYSE: DO), Baker Hughes (NYSE: BHI) and others were higher. Small oil companies, which are currently selling at low prices like the little known Canadian company United Hunter Oil & Gas (TSX: UHO), that owns serious oil acreage in California may also be worth getting into for a lower risk investment in case the President’s promises don’t all come to fruition.
As it looks now; however, the energy plan introduced today seems more feasible than 2008’s primarily because instead of costing the government major dollars with alternative energy its using our current resources to create jobs and federal money.
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