But the fracking states are booming.
Texas is going to flip blue in the next few elections anyway, so Obama has a vested interest in keeping them happy.
The real play is against Russia and the house of Saud. However, Russia is not acting like the old Soviet’s. Cut off their source of petrodollars, and they will probably move to reclaim the Ukraine and maybe Finland.
They (the house of Saud and the Russians) view the increase of US oil production as an act of economic war against them. They may decide to retaliate in a more direct manner. For that matter, the drop in oil prices will probably bring an end to the house of Saud.
Did you see this election results? ALL statewide election democrats lost by double digit percentages.
One can postulate, based on the 1985-86 history, that their economic boom will wither as crude oil prices retreat to the point that working over rapidly declining frac wells is no longer attractive. That economic point varies with the debt level of the producer and the characteristics of a particular well. Numbers in the $30 to $50 per barrel range have been publicized, generally from consultants. Some independent producers have already announced cutbacks in drilling and some layoffs of personnel.
I live in Texas. The theory that Texas is going to turn blue is seriously flawed. Wendy Davis, the democratic candidate, lost the governor's race by a larger percentage than even the late polls anticipated. Further, turning blue requires that the rising Texas Hispanic population vote democratic. I have Hispanic grand children and know a large number of Hispanics. The ones I know are hard working, family oriented, Christian, and generally conservative. I detect no tendency for them to vote democratic, rather a strong tendency for them to support conservative values.
Obama has already taken steps to try to weaken Texas; NASA, immigration, drilling permit delays, environmental rules that inequitably penalize Texas to name just a few.
The house of Saud does not view the Russian with favor, as near as I can tell. They certainly did not in 1985-86. Now that the Russians actively support Saudi rival Iran, there is no reason to think the Royal family supports the Russians.
The Royal family is facing some risk from increased unrest in the middle east which might threaten their rule. However, they have significant financial reserves from which to continue paying for social programs to essentially buy support. Probably the threat to their rule is at a manageable risk level, and they can always reverse course if the risks increase to an unacceptable level.
An interesting question, who has been shorting the futures contracts for crude oil? That is the immediate mechanism to drive prices down. I can imagine that the Saudi’s and UAE have used some of their financial reserves to do just exactly that.