Does anyone else find it strange that while we see headlines galore about an economic slowdown and a possible recession, Congress is bringing the CEOs of the major oil companies in to "defend"their industry yet again? We are very focused on combating inflation; unfortunately, this invariably translates to "get those oil guys."Last time I looked, the best way to decrease price was to increase supply and reduce demand. Well, since there is no way to quickly reduce demand, we really need to be looking at supply.

The United States is the third-largest supplier of oil on the planet, and we produce 28 percent of our domestic needs right here within our borders. We are complaining to our oil companies that the price of the refined product is just too high. To bring those prices down, however, we are going to increase the tax burden on those companies and take away profits generated by creating that supply. In essence, we are going to punish our local industry for doing its job. At the same time, we are going to do everything in our power to help the OPEC countries increase their output of oil! Why does that make sense to our legislators?

In this month's issue we turn our attention to the up-and-coming cap-and-trade system for emission reductions. Nobody in the industry thinks implementing a failed system from Europe here in the United States is going to help us get out of a recession, but Congress is not listening. In our cover story, "Dunce Cap,"Susan Salter and I take a look at what the experts say the economic impact is going to be. Anyone reading this would rightly say, "Back to the drawing board."However, we all know that was the same opinion we had on ethanol, and that became mandated in 2005. So we know cap and trade is coming. The best we can do now is sound the warning and hope someone hears it.

Also this month, Hugh Ebbutt assesses what he sees as an inevitable shortfall of oil supplies - a pinch, he says, is bound to happen sooner rather than later. Compounding that problem, he notes, is the "institutional denial"of governments and even our own industry. In his discussion of everyone's favorite gasoline alternative, Robert Rapier compares the beneficiaries of the ethanol mandate (primarily Big Corn and its lobbyists) with those likely to be left paying the price (that would be the rest of us). And as if Sunni-Shiite battles weren't enough, now inter-Shiite conflicts are threatening Iraq's energy stability, as Cyril Widdershoven reports.

May's spotlights on North America, Latin America and Africa touch on yet more testimony from oil CEOs to Congress, a possible windfall in offshore oil for Cuba and a growing threat to Chad's oil-producing region.

Pump prices past $3 a gallon are now the rule rather than the exception, and many analysts are pointing to a $4 gallon in time for summer's driving season. There is no better time, in the eyes of media and politicians, to point the finger at Big Oil - conveniently overlooking the steady supply of energy we all take for granted. We can only speculate what our peeved citizens will think when (not if) cap and trade causes the same economic havoc here in the United States as it has in Europe.

Richard R. Loomis
Editor-in-Chief