Will Unrest in the Middle East and Northern Africa create a need for Energy Legislation?

Common wisdom says that there will be no form of comprehensive energy legislation during this next year – most especially no carbon cutting legislation.

But instability in the Middle East and Northern Africa could change that a bit.  This unrest could mean a sustained and significant rise in oil prices.  Oil prices have already risen 7.35% since January 1 and yesterday oil futures were at $100/barrel in NYMEX. 

The real issue is if this instability in the Middle East will have an effect on in the production or delivery disruptions that could drive energy prices much higher.  According to Bloomberg, Prices may surge to $220/barrel if more production is halted in Libya and Algeria, analysts at Nomura Holdings Inc., led by Michael Lo in Hong Kong, said yesterday in a note. Algeria is also an OPEC member"  http://bloom.bg/eTy1BO

The public will react to high gas prices and, among other things, change their purchasing habits.  Energy Consultant Mike Grisso, states that if the price of gas reaches over $4.00/gallon, then you could see  legislators coalescing arund some form of energy legislation.  This legislation would be directed toward energy independence i.e. offshore drilling or alternative fuels. 

Although, Politico’s Morning Energy quotes former Department of Energy Secretary, James Schlesinger as stating, “Anybody who’s talking about energy independence is smoking pot, there’s no way we’re going to get to energy independence as long as we depend on the internal combustion engine.”  morningenergy@politico.com.

 It will be interesting to see how the unrest in the Middle East and higher energy prices, especially at the pump, will have any effect Federal energy legislation.