Follow this link to an item that purports to explain why oil companies don’t drill. This article was recommended to me by Richard H.

I think this explanation makes a lot of sense to me.  I have read similar items before.  Also, in George Soros’ latest book, he explains some of the problems with the theory of supply and demand.  I always chalked these problems up to the fact that supply and demand is an explanation of a static situation.  During a period of large change, the system has not settled to a static equilibrium that static supply and demand curves might predict.  I think this article and George Soros’ book are are agreeing with the part of the problem that I have identified, but George Soros adds other details that I had not thought of.

As for oil specifically, there is one issue that I would like to see discussed.  While it may be true that there are a lot of oil leases that the oil companies are not exploring, this might not be a fair reason for not opening up other areas for drilling.  It could be that the leases that the oil companies are not actively exploring are not as attractive as the ones that are currently off limits.  I am not a proponent of opening up more areas for drilling.  It is just that if we are going to have a discussion of the issue, I would like all sides to be honest during the discussion.  If either or both sides are obscuring the truth, then how can we come to a rational decision after the discussion?