WASHINGTON—President George W. Bush announced he will lift the executive ban on offshore drilling for oil, which he said will allow for increased domestic oil exploration if Congress lifts its current ban on offshore drilling.

Bush said Congress needs to take action to expand domestic oil production at a time when oil is hovering between $125 and $140 per barrel and the price of a gallon of diesel is more than $4.70. He added that increasing access to offshore oil exploration on the Outer Continental Shelf is one of the “most important steps” that needs to be taken in order to expand American oil production.

Various media reports have suggested that there are pros and cons to the notion of offshore drilling. While the White House contends that it’s needed in order to drive down rising energy and transportation expenses, past presidents and Congress have opposed offshore drilling in order to protect beaches and coastal states. U.S. Speaker of the House Nancy Pelosi labeled this concept as a “hoax,” saying that the White House is echoing the demands of large oil companies because the move will not reduce gas prices or increase energy independence.

Reed Business Information Chief Economist James Haughey told LM that lifting this ban is only symbolic, saying “it’s just a way to be sure that everyone knows that Congress is now the entity that is preventing offshore drilling.” The Associated Press reported that White House officials said while offshore drilling would not have any immediate affect on gas prices, it still makes sense to take action.

“The practice of drilling for additional oil in North America has the promise of adding additional supply some eight to 15 years from now, and some of the suggestions shouldn’t be dismissed just because of political heel digging,” said Tom Kloza, publisher and chief oil analyst of Oil Price Information Service, a petroleum pricing and news information service. “But neither side of the aisle recognizes that a solution requires myriad action—less demand, more supply, some behavior tilting for excessive users, and incentives to use sensible alternatives or even emphasize mass transit. The American public isn’t a beneficiary when Republicans emphasize 'drill, drill, drill’ and the Democrats simply want to 'tax the evil oil companies,’” he added.

As has been widely reported, the ongoing fuel spikes have had a significant effect on freight transportation operations—especially trucking—from a costs and operations planning perspective. American Trucking Associations Senior Vice President Tim Lynch testified recently before the House Committee on Agriculture, calling on Congress to implement a comprehensive plan to address fuel prices and ensure an affordable supply for America’s 3.5 million truck drivers, as well as consumers.

“The fuel crisis we face today is severe,” Lynch said in his testimony. “There is no one single solution to high oil prices. We need to conserve fuel and increase oil production to emerge from this crisis. But neither of these in itself is a total solution. Congress must embrace a multifaceted approach to solving this problem.”