It has been widely charged that Bush and Cheney were trying to get approval to drill for oil on the Alaskan North Slope and off the coast of the US to help their oil company buddies. I think this reveals fuzzy thinking since it seems unlikely that their oil buddies want to drill more. Oil demand is inelastic so a few percent increase in the supply could significantly reduce the price of oil. I think the oil companies would much rather sell the reserves they currently have for $75 per barrel than spend huge amounts of money to develop more oil supply to drop the price of oil to perhaps $30 per barrel. That will clearly give them a better return on investment. In addition, they will eventually get to exploit the North Slope and off-shore oil, and probably sell it for over $100 per barrel. Because of the consolidation in the oil industry and the enormous amounts of money it takes to develop oil fields in Alaska and off-shore it is unlikey that any entrepreneurs will develop the oil so it will eventually go to the major oil companies by default. This is illustrated by the development of the Barnett Shale natural gas field in Fort Worth which was developed by small independent companies. The Barnett Shale field is now the leading natural gas producer in Texas, and that supply is part of the reason that natural gas price has fallen from $15 per thousand cubic feet to under $6. (It should be noted that Texas is about the only state in which regulations don't make it difficult to drill for petroleum, but after 100 years of exploration there is probably not much undiscoved petroleum in Texas.) And now the major companies are moving in to buy the reserves of the smaller companies in the Barnett Shale. My guess is that the majors are not happy about all of this.

My opinion is that Bush and Cheney were trying to help American consumers by drilling on the North Slope and off-shore to increase the oil supply. I suspect their oil field buddies have been making campaign contrributions to Democrats who block efforts to drill more to increase the oil supply.