Facing high gasoline prices and a potential energy crisis, Barack Obama has caved in to pressure and will open oil reserves in Alaska for drilling leases. More oil wells for more domestic oil production was a key part of Obama′s weekly Saturday address. “I believe we should expand oil production in America, even as we increase safety and environmental standards.” Recent polling data shows that there would be a significant decline in consumer spending should gasoline prices remain above $4 a gallon for a protracted time. While commodity prices declined after a drop in the value of the Euro the past two weeks, the fundamentals are still not good. The GOP controlled House of Representatives voted this week to lift the moratorium on off shore drilling in the Gulf of Mexico, as well as other bills to help boost domestic oil production. Meanwhile, in some urban centers in the continental United States, gasoline prices have not only passed $4 a gallon, but is at or near $5 a gallon.

obama Alaska oil drilling

This shift in the Obama White House policy is purely political, driven by polls. While Obama got a slight bump in his job approval numbers following the death of Osama bin Laden, the boost in the President′s popularity was fairly low. Only one poll conducted for the Associated Press put Obama at 60%, and that poll is clouded by its internal numbers, with only half as many Republicans participating as Democrats. Instead of the usual 35% to 28% split, the AP poll questioned 35% Democrats to only 18% Republicans. Even with such number-fudging, on economic issues, Obama still ranks low, below 50% approval.

Today’s announcement by Barack Obama to open oil reserves on the North Slope of Alaska to drilling signals a shift in administration policy. Facing voter angst from high gasoline prices, even an energy crisis should things in the Middle East deteriorate, Obama will extend existing leases and may also open up off shore drilling along the Atlantic coast. While it could take 3 to 5 years for an oil well to begin producing crude, Obama recognizes the need for increasing domestic oil production at long last. Just in time for his 2012 reelection campaign.

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