Posted on 10/26/2014 6:23:51 PM PDT by Coleus
American workers and motorists got some badly-needed relief this week when the price of oil plunged to its lowest level in years. The oil price has fallen by about 20 to 25 percent since its peak back in June of $105 a barrel. This is translating to lower prices at the pump with many states now below $3 a gallon.
Already the lower oil and gas prices are the equivalent of a $70 to 200 billion cost saving to American consumers and businesses. Thats $70 to 200 billion a year we dont have to send to Saudi Arabia, Kuwait and other foreign nations. Now thats an economic stimulus par excellence. There are many global reasons why gas prices are falling, but the major one isnt being widely reported. America has become in the last several years an energy-producing powerhouse. And sorry, Mr. President, Im not talking about the niche green energy sources you are so weirdly fixated with.
Oil prices are falling because of changes in world supply and world demand. Demand has slowed because Europe is an economic wreck. But over the last five years since 2008 the U.S. has increased our domestic supply by a gigantic 50 percent.
This is a result of the astounding shale oil and gas revolution made possible by made-in-America technologies like hydraulic fracturing and horizontal drilling. Already thanks to these inventions, the U.S. has become the number one producer of natural gas. But oil production in states like Oklahoma, Texas and North Dakota has doubled in just six years.
Without this energy blitz, the U.S. economy would barely have recovered from the recession of 2008-09. From the beginning of 2008-13 through the end of 2013 the oil and gas extraction industry created more than 100,000 more jobs on net than all other industries combined while the overall job market shrank by 970,000.
When the radical greens carry around signs saying No to Fracking, they couldnt be promoting a more anti-America message. It would be like Nebraska not growing corn. We are just skimming the surface of our super-abundant oil and gas resources. New fields have been discovered in Texas and North Dakota that could contain hundreds of years of shale oil and gas supplies.
Heres another reason to love the oil and gas bonanza in America. Its breaking the back of OPEC. Saudi Arabia is deluging the world with oil right now, which is driving the world price relentlessly lower. The Arabs understand as too few in Washington do that shale energy boom is no short-term fad. It could make energy cheaper for decades to come.
As American drillers get better at perfecting the technologies of cracking through shale rock to get to the near infinite treasure chest supplies of energy locked inside, we will soon overtake Saudi Arabia as the dominant player in world energy markets.
You cant have a cartel if the worlds largest producer America isnt a member. OPEC will never again be able to hold the world at knifes point and create the level of economic turmoil that the Arab members of OPEC engineered in the 1970s with their oil embargo.
And by the way: lower oil prices place increased pressure on Irans mullahs to abandon their nuclear program and curb Putins capabilities to engage in is there a better way to defund the terrorists who run ISIS or to thwart Putins East Europe aggression. than to drive down the price of gas and oil?
Yet the political class still doesnt get it. As recently as 2012 President Obama declared that the problem is we use more than 20 percent of the worlds oil and we only have 2 percent of the worlds proven oil reserves. Then he continued with his Malthusian nonsense, Even if we drilled every square inch of this country right now, wed still have to rely disproportionately on other countries for their oil.
Apparently, neither he nor his fact checkers have ever been to Texas or North Dakota. And we dont have 2 percent of the worlds oil. Including estimates of onshore and offshore resources not yet officially discovered, we have ten times more than that the stat quoted by the president resources sufficient to supply and hundreds of years of oil and gas.
America, in sum, has been richly endowed with a nearly invincible 21st century economic and national security weapon to keep us safe and prosperous. The fall plunge is gas prices is just one visible sign of this supply explosion.
Think of how much bigger this revolution could be if we started building pipelines, repealed the ban on oil exports, expanded drilling on public lands, and stopped trying to punitively tax and regulate the oil and gas industry out of existence.
For much of the last forty years, oils periodic price spikes have remained a constant threat to economic growth. Higher consumer energy costs as well as increased industrial production costs weighted on the economy. Now, oil it is one of the primary accelerators; and the new big drag on the economy is politicians who hate despise the carbon-based is industry.
It works better just to put his Marxist cabal in charge. Well, at least it works better for the Marxist cabal.
Apparently, neither he nor his fact checkers have ever been to Texas or North Dakota. Sorry I can’t miss an easy shot like this, Frack checkers might be more to the point.
Even more importantly, shale oil and gas aren't limited to North America. Most of the world's countries have more than sufficient resources below their feet to supply all their needs. When America and Canada have been drilled to the max, North American drillers can fan out around the world and make other countries energy self-sufficient, too.
The world market in energy has been a major source of turmoil and of strain on the economies of poor nations. With their own energy, they can tell OOEC to jump off a cliff.
The author doesn't mention it, but this is what SA is trying to head off by intentionally driving prices down. They're trying to disincentivize more drilling that will in the long run compete with them.
Now let’s get the miners back to work and quit closing the coal electrical plants so our electric bills go down.
Obama stole the presidency with OPEC oil money. There’s no way the anti-American POS will ever promote U.S. energy independence.
I heard some rumor:
that it was ISIS taking over some oil fields/refineries and selling for less
I.e. undercutting the market.
A rumor ..... heard it umpteenth hand.
that it was ISIS taking over some oil fields/refineries and selling for less
That is no rumor. I have read it and seen it reported repeatedly.
Part of the reason oil prices are plunging is the unrest in the middle east. The dictators there need money to pay troops and buy munitions, not to mention beefing up their Swiss bank accounts.
That incentivises them to sell more, for short term gains, because they do not know what the long term will mean.
That and the customary release of strategic oil reserves right before the elections.
Marktwain,
Have you got some links for this?
All I’ve heard is rumour and third hand stuff....
The article doesn’t mention that all the drilling for natural gas is a result of Obama’s war on coal. He’s closing coal burning plants faster than the media can figure out how to lie about it.
Electricity generation is increasingly being provided by natural gas because Dems don’t consider it a fossil fuel. A by-product of drilling for natural gas is oil.
Here are three links:
http://au.ibtimes.com/articles/564182/20140827/obama-isis-oil-sales-middle-east.htm#.VE2qcRKYNok
We are producing more oil (on private lands) PLUS fewer people are working......markets always work
The average cost to recover an American barrel of oil is over $60 per barrel. If prices go below $80 then marginal wells will be capped. If prices are sustained at current levels then it will disrupt future investments in new American oil.
The reason prices are dropping is Saudi Arabia is defending its market share by dropping it price. Its recovery cost are below $20 per barrel and is of the highest quality i.e. least amount of sulfur content.
And oil consumption is at a slow but steady decline in the US.
No. That hasn't happened. Nor is it "customary".
Last week I refilled my grill propane tank. The cost was $8 less than the time before
Yesterday I bought diesel fuel at Sams for $3.25 per gallon. Regular gas was $2.69
I don't know about that. Whatever the source, it sure seems that, in my memory at least, fuel prices always drop around election time. YMMV. d:^)
This trend in dropping gasoline prices started in late April.
From March, not an election sale.
That oil sold for about $100 a barrel.
http://www.spr.doe.gov/doeec/TestSale14/Successful_Awards_Report.pdf
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