The real energy problem, in other words, isn't Big Oil; it's Big Government.

As with so many other things, President Reagan got it right when, not even a week after taking office in 1981, he signed Executive Order 12287 decontrolling the price of oil and gas. He then ordered his secretary of energy to focus on encouraging U.S. companies to find and produce more.

It worked like a charm, bringing oil prices down sharply and OPEC to its knees. By 1986, after a 74% drop in the price of oil, some even doubted OPEC could survive.

Such would-be monopolies look invincible when demand rises and prices follow. But when supply increases, prices fall and members start cheating, they look pathetic. This pretty much describes the history of OPEC.

Reagan's strategy of energy decontrol would work again today. But this time it's supplies, not prices, that need to be untethered.

Breaking The Back Of High Oil
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