Why Energy Independence Matters

The Washington Times posted an article today about Iranian military exercises in the Straits of Hormuz. The Straits of Hormuz is significant because 35% of all seaborne traded oil, or almost 20% of oil traded worldwide flows through the Straits of Hormuz. This is something to watch as the situation in Iran becomes more volatile.

This is today’s Dry Bones cartoon:

The Washington Times reports:

Iran’s navy sent dozens of small boats into the Strait of Hormuz on Thursday, dramatizing its ability to choke off the strategic Persian Gulf waterway — a move that could send global oil and U.S. gasoline prices soaring — and escalating the confrontation with the Trump administration for withdrawing from the 2015 nuclear deal.

U.S. officials said the naval exercise was Tehran’s way to show its capability to create a disruption in the waterway, through which some 30 percent of the world’s sea-transported oil passes daily. Officials at the Pentagon said they expected the exercise would last only a few hours, although it was unclear Thursday night whether it had ended.

“We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce,” said a statement by Navy Capt. Bill Urban, U.S. Central Command spokesman.

The development marked Iran’s latest escalation in response to Mr. Trump’s promise to begin reimposing harsh economic sanctions in the coming days that were suspended under the 2015 deal. One Pentagon source said the unexpected Iranian navy moves were meant to hammer home Tehran’s rejection of President Trump’s offer this week for direct, unconditional talks with Iranian President Hassan Rouhani.

The article details the unrest in Iran:

It is an increasingly delicate moment for Mr. Rouhani, who faces protests in Iran over the nation’s struggling economy, weak growth and declining currency.

The Rouhani government has been rocked by a string of protests in cities across the country over the failing currency, mismanagement and investor fears of U.S. sanctions, the first wave of which is set to begin Tuesday. The Trump administration is pressuring Iran’s other trading partners in Europe and elsewhere to curb trade and investment ties as well.

A report by the official IRNA news agency said about 100 people took to the streets Thursday in the northern city of Sari and that demonstrations broke out in at least three other cities. The agency reported that none of the protests had official permission and all were broken up by police.

Iranian dissident groups abroad have detailed multiple demonstrations in recent days, with harsh police crackdowns in response. The Associated Press cited videos circulating on social media purporting to show dozens of demonstrators setting fire to police vehicles and shouting “death to the dictator.” The authenticity of the videos could not immediately be verified.

One way for a dictator to unite his people is to unite them against a common enemy. This may or may not work in Iran since many of the younger people in the country are more inclined toward western ideas than the ideas of the mullahs.

The article concludes:

“Any disruption of oil supplies in the Persian Gulf would be a major threat to the global economy and would hurt U.S. trading partners, thereby damaging the U.S. economy,” said Amy Myers Jaffe, who heads the Program on Energy Security and Climate Change at the Council on Foreign Relations.

U.S. domestic oil and gas production and export increases in recent years “have not reduced the U.S. need to police the free flow of oil from the Middle East,” Ms. Myers Jaffe wrote in an analysis for the think tank this week. “An oil price rise due to the loss of supply in one part of the world is reflected in U.S. price levels as well all other locations across the globe.”

Rockford Weitz, who heads the Fletcher Maritime Studies Program at Tufts University, said that in the Strait of Hormuz, Iran “could damage commercial shipping with relatively cheap anti-ship missiles, fast patrol boats, submarines and mines.

“Even threats and modest disruption to commercial shipping could trigger economic damage in the form of higher marine insurance rates, crude oil supply concerns and unsettled stock markets,” Mr. Weitz wrote in an analysis published by Tufts last month.

We live in a fragile world–keep praying.

They Were For It Before They Were Against It

On Thursday, Investor’s Business Daily posted an article about the rising price of gasoline. It is becoming obvious that the Democrats plan to blame President Trump for the increased cost and use the issue in the 2018 mid-term elections. Well, not so fast.

The article reminds us that in the past the Democrats have supported increasing gasoline prices in the name of the phony science of global warming.

The article reminds us:

Sen. Minority Leader Charles Schumer and other Democrats plan to use this price spike to blast President Trump and, hopefully, improve their election chances in November.

“President Trump’s reckless decision to pull out of the Iran deal has led to higher oil prices,” Schumer said. “These higher oil prices are translating directly to soaring gas prices, something we know disproportionately hurts middle and lower income people.”

But Schumer, as well as the reporters covering him, should know that the high gas prices are the result of three factors that are beyond Trump’s control.

One is the fact that OPEC has tightened its production quotas to counter the huge increase in U.S. oil production thanks to the fracking revolution. Trump has been trying to boost production still more.

So what have Democrats said about gasoline prices in the past? The article reports:

As recently as 2015, Democrats were pushing to nearly double the federal gasoline tax. At the time, House Minority Leader Nancy Pelosi said that it was the perfect time to do so because “if there’s ever going to be an opportunity to raise the gas tax, the time when gas prices are so low — oil prices are so low — is the time to do it.”

Democrats in California pushed through a 12-cent-per-gallon hike in the state’s gas tax last year that Republicans are vowing to roll back if they can.

…At the same time, Democrats have pledged to impose a tax on carbon emissions of around $50 per ton of CO2 — which would go up each year at a rate faster than inflation — to combat “climate change.”

Schumer himself promised to enact a carbon tax if Hillary Clinton won and Democrats regained control of the Senate in the 2016 elections.

Well, guess what? A carbon tax of that magnitude would sharply raise gasoline prices. A report out of the University of Michigan last fall concluded that a carbon tax of $40 per ton would hike gasoline prices by 36 cents a gallon.

Higher gasoline prices impact everyone who drives a car, a truck, or a motorcycle, whether they are rich or poor. To people who depend on their car to get them to work every day, the increased price of gasoline can mean the difference between taking a family vacation or staying home. It can mean the difference between taking the family out to dinner occasionally or eating at home. Financially and mentally, the price of gasoline matters. It is unfortunate that rather than work with the President to help bring the price of gasoline down and bring financial relief to Americans, the Democrats are choosing to make gasoline prices a political issue.

Are You Enjoying The Current Price Of Gasoline?

On Sunday, Stephen Moore posted an article at The Daily Signal about the recent decline in gasoline prices. The article reminds us that in June, oil reached a peak price of $103 a barrel. Since then, the price has dropped 25 percent. American motorists are seeing the results of that drop in gasoline prices at the pump that have dropped below $3.00 per gallon. At their present levels, gasoline prices are saving American consumers and businesses $200 billion a year.

The article reports:

Oil prices are falling because of changes in world supply and world demand. Demand has slowed because Europe is an economic wreck. But 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 through the end of 2013 the oil and gas extraction industry created more than 100,000 jobs while the overall job market shrank by 970,000.

President Obama, you didn’t build this recovery (such as it is)–it happened in spite of you! The energy blitz in America is breaking the back of OPEC. They can no longer blackmail western countries with threats of cutting off their oil supply.

The article further reports:

Yet the political class still doesn’t get it. As recently as 2012 President Obama declared that “the problem is we use more than 20 percent of the world’s oil and we only have 2 percent of the world’s proven oil reserves.”  Then he continued with his Malthusian nonsense,  “Even if we drilled every square inch of this country right now, we’d 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 don’t have 2 percent of the world’s oil. Including estimates of onshore and offshore resources not yet officially “discovered”, we have ten times more than the stat quoted by the president–resources sufficient to supply hundreds of years of oil and gas.

If the President and his Democrat allies would get out of the way, the American economy would recover. Please remember that when you vote next week.