Free Markets, Free People

Economic growth and national security? Or taxes?

The Financial Times [subscription] is reporting that the US is poised to become the world’s largest producer of liquid petroleum (oil and natural gas liquids):

US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.

With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991. […]

Rising oil and gas production has caused the US trade deficit in energy to shrink, and prompted a wave of investment in petrochemicals and other related industries. […] It is also having an impact on global security. Imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.

The reason?  Fracking.  As Walter Russell Mead points out:

With productivity continuing to rise, the United States has a chance to become the single biggest producer of crude oil sometime in the near future. If you had said that a decade ago, you would’ve been laughed at and called a fool. What a difference fracking makes.

Indeed.  The “peak oil” pundits were sure we were on the precipice of running out of oil.  Now, it seems, the sky is indeed the limit.  Which is why it makes little sense, given the state of climate science, that our President is busily engaged via the UN and other domestic agencies, in throttling back one of the most economically viable growth engines the American economy has at the moment (and for the foreseeable future).

Instead of working on a policy to limit future use of hydrocarbons, this White House should be pushing a policy that helps us safely and sustainably exploit these assets for all.  Additionally, while petroleum is indeed a global commodity, this level of production would go a long way toward the promise of energy independence in time of crisis.  It helps remove oil as a weapon of choice by various less than friendly states and allies of convenience.

Two winners for the US: economic growth and national security.

Instead we get an attempt to establish an new tax based on specious science.

Sort of par for the course, no pun intended.


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18 Responses to Economic growth and national security? Or taxes?

  • Again, it is impossible to attribute this level of outright harm to the U.S. and its people to fecklessness.

    This is a design. It is a program. Now, from whence it comes is subject to opinion. Frankly, I don’t care.

    • Manchuria.

      • The only question is how much the media and the swooning celebrities who worship before the anointed one understand this. Many of them obviously would share the desire to take the US down a peg, to punish us for the decades of imperialism. Many are just too stupid to see beyond the hopey-changey feel good slogans. But what of the rest, who must certainly have at least a modicum of awareness that this man is truly a saboteur? Are they just in denial? Or, too proud or too timid to question the myth?

        • How ’bout it, Erp…???

          Over to you.

          • Can we focus on people who actually have influence, who could sound the alarm on this vandal? What if a healthy 10% of the MSM started digging and questioning, instead of leaving Sharyl Attkisson out in the cold by herself?

            Or, what if comedians actually had the temerity to make substantive, biting satire of this terrible president, instead of fearing being accused of racism? It’s like the people who have a high time ridiculing Christians but are silent when it comes to the misogynistic savages following the illiterate pedophile prophet Muhammad.

            A nobody clown stuck in the Siberia of acanemia matters less than Conan O”Brien, for example.

          • Well, I certainly agree with all of that.

            In this forum, however, we don’t have a Conan to kick around, so we have to settle for the Mavin Of Moosesqueeze.

            We CAN try to reach the Conans of the world AND kick Erp around, too. See? Par–tee…!!!

  • Just imagine if those oil production gains were on public property

  • If we’re not output constrained, I don’t see the justification of the current price which is roughly 2x the late 90’s price adjusted for inflation.

    Unless we are globally constrained. But then why hasn’t the rest of the world made the same production strides that the US has made on private lands alone? Either the rest of the world has hit peak oil or they choose not to increase production. If its the latter, OPEC, Russia and a few other players are running an de facto cartel. Until the US exports raw oil, the cartel action won’t be affected by US production and hence the global price will remain high. That’s assuming the US would threaten the price fixing which I have doubts.

    Regardless of who does what they’re a discrepancy in price that, if isn’t explained by peak oil, isn’t justified. I don’t like paying oligopoly tax anymore than I like paying government tax.

    • Market price – that oil that comes out of the ground doesn’t belong to the “US”. It goes into the big world market oil storage tank.

      It belongs to the people who took it out of the ground at first, and then to the middlemen who buy it and raise the price to what the market will bear.

      All that said, just in case people forget where politicians easily find the public’s motivation to ‘nationalize’ natural resources with promises of lower priced domestic fill ups.

      If we don’t start hearing that groundswell rumbling in a bit as people see prices stay the same despite the bragging over the supply I’ll be surprised.

      • Not exactly because it is still illegal to export crude from the US. The refined products can be exported and have been for many years. The current debate is exactly how much refining does crude has to undergo before it can be exported. IOW does it have to be refined to the point of final product (gasoline, diesel, etc…) or can it be just refined a “little” and then exported.

        • But they’re still pricing it all based on the market and obviously someone is making a profit right?

          Otherwise how is it that the prices have stayed fairly stable despite ISIS/ISIL/SYRIA/RUSSIA unless that’s all been factored out of the global pool and no one prices based on those supplies any more.
          Production goes up in the US and we see an occasional bump if someone drops a bomb in Mosul, but pretty much the prices have magically stabilized to within a 30 cent slack in most areas of the US.

          When GW was President sometimes the gas price ride was more like something at Six Flags, but with Barry the boy king as President it rose to a happy $3.00+ and has stayed happily there despite the production rise here and the seeming sudden armor proofing that appeared in the Middle East as far as price vs supply fears.

          I don’t pretend to understand how that can happen so smoothly at it seems to have done in the last few years.
          Unless of course President George W Bush is profiting from it! Oh, wait.

    • Mineral rights in a lot of places are nothing like they are in the U.S.

      Fracking is not being done in some places that are good prospects because of the regulatory crap there.

      Output of refined products is constrained, especially in the U.S. by the inability to increase capacity outside of existing refineries.

  • Hey, it’s not a problem! We made sure there would be new shovel ready jobs by not restricting air passengers traveling from Liberia to the US!

    • Har, har, excellent! Although if it really catches on here, it may be bulldozer ready jobs.

      • Needless to say living in Dallas has suddenly become a little more exciting. We’re all sorta waiting now for the other shoes to start dropping.

      • All the fun of living in Liberia without leaving your own town!

  • It is obvious that Obama’s utter incompetence is due to Climate Change