We cannot drill our way out of this oil crisis. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year.
Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.
We are going to have to import more of our oil. Period.
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Several US airlines, roiled by unrelenting fuel costs, disclosed this week that they are winnowing daily flights to certain destinations, eliminating entire routes, and in some cases withdrawing from airports - and this is just the beginning.
A Goldman Sachs report issued yesterday indicated such cuts will not be enough to compensate for the cost of fuel.
"We expect carriers to explore any and all options - capital raises, foreign capital infusions, strategic transitions, asset sales, alliances - in an attempt to bolster their positions financially and strategically in this quickly deteriorating environment," wrote analyst Christopher Cuomo. "But in a world of sustained $100-plus oil, we are not convinced these actions can provide enough relief to offset the challenges that lie ahead."
