Now that President Bush has formally called on Congress to lift its ban on off-shore drilling and on-shore drilling in previously restricted areas such as the Alaska National Wildlife Refuge, the big argument can officially begin. On one side, E&P companies will argue that US national security depends on producing oil from US holes, thereby making the US less dependent on foreign oil. On the other side, the argument is that the US can not drill itself out of the current supply/demand imbalance.

Around the nucleus of these two arguments other important issues will be spun like so many electrons: OPEC's power, speculation, global warming. Let's examine each of these briefly.

Last week's EIA report reports crude oil inventories down 4.6 million b/d from the previous week's levels, and gasoline inventories up 1.0 million b/d in the same period.

A couple of questions should leap immediately to mind. First, why are crude inventories falling? Second, do the gasoline inventories indicate that Americans are consuming less?