This Is Not Really Bad News

Bloomberg is reporting today that OPEC (organization of the Petroleum Exporting Countries) has agreed to cut oil production beginning in January. The market has already reacted, and crude prices have climbed to $50. That means that the price of a gallon of gasoline will be going up, heating oil will be going up, and the cost of electricity may also be affected. However, there is a bright side to this.

One of the things to expect in a Trump Administration is the development of America‘s gas and oil resources. The Obama Administration has blocked that development wherever possible. Theoretically, the price increase along with the end of some regulations could create energy independence for America. This would have a drastic impact on our foreign policy. There is, however, more to the picture. In the past when OPEC has seen America moving toward energy independence, they have dropped the price of oil so that development of America’s oil reserves did not make financial sense. It will be interesting to see if they do that again.

We also need to remember what the impact of American energy independence will do to the world market of oil. If America can reach a point where it exports oil, OPEC will no longer be important. It will be interesting to see at what point practicality on the part of OPEC overcomes immediate greed. Their immediate greed will encourage the growth of the American energy market. Practicality would keep prices low so that America had no incentive to develop its resources.

About That “All Of The Above” Energy Policy

CNS News posted an article yesterday about President Obama’s claim that his administration has followed an “all of the above” energy policy in order to make America more energy independent.

There is a chart of U.S. Imports of Crude Oil and Petroleum Products from 1981 to March of this year posted by the U. S. Energy Information Administration. The chart shows that oil imports are lower now than when President Obama took office in 2008. What it doesn’t show us is that one of the major reasons for the lower oil imports is the slowdown in economic activity in America during that time period. If the true statistics were being reported, they would show that about 11% of Americans are unemployed. That means 11% of us are not driving to work every day. The percentage of Americans actually in the workforce is the lowest it has been since 1981. Many Americans have postponed vacations due to economic concerns. Lower oil imports generally do not occur when the economy is thriving.

The article at CNS News relates some inconvenient facts about domestic oil production under President Obama:

Kathleen Sgamma, vice-president for public and government affairs at the Western Energy Alliance, said oil and gas regulations prevent companies from using leases they have bought to drill on federal lands.

“Western Energy Alliance estimates conservatively that BLM’s [Bureau of Land Management] planned regulations will add about 100 days to permitting times,” she told the panel. “With federal permitting times of 298 days, while states can process their corresponding permits in about thirty days, it’s difficult to understand why the federal government is trying to usurp control from the states which have proved themselves more effective and efficient.”

Sgamma noted that the increase in federal production had occurred on private and state-owned lands, not in areas controlled by the federal government, belying claims that production is up because of Obama’s policies.

The article at CNS News also reminds us that the President’s energy plan has been to pick winners and losers, which has interfered with the free market. Because of this, innovation has been stifled, and products that were not economically feasible have been subsidized, only to go bankrupt and increase unemployment.

The article at CNS News further reports:

“Despite all the obstacles put in place by this administration, oil and gas companies, responding to market forces and the demands of a nation for energy, jobs, and economic growth, have dramatically increased production and reduced foreign imports.”

Sgamma added that “5.5 times more oil is produced on private and state lands than on federal lands.”

Frankly, the only impact the Obama Administration has directly had on American energy production is to slow it down and drown it in red tape. Unfortunately most of the major media has not bothered to report that or to fact check the President’s claims about his energy policy. 

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Fact Checking Some Of The President’s Recent Statements On Energy

CNS News posted an article posted a story yesterday about the President’s recent statements about his administration’s energy policy:

The article reports:

In his March 10, 2012, Weekly Address, President Obama said that “[u]nder my Administration, oil production in America is at an eight-year high. We’ve quadrupled the number of operating oil rigs, and opened up millions of acres for drilling.”

He continued: “But you and I both know that with only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices – not when we consume 20 percent of the world’s oil. We need an all-of-the-above strategy that relies less on foreign oil and more on American-made energy – solar, wind, natural gas, biofuels, and more.”

Well, he seems to have conviently overlooked a few things.

Some inconvenient facts reported in the article:

As CNSNews.com has reported, oil production on federal lands declined in fiscal year 2011 from fiscal year 2010 by 11 percent, and natural gas production on federal lands dropped by 6 percent during the same timeframe.

In contrast, oil production on private and state lands accounted for the entire increase, reported the IER, as production was up 14 percent from 2010 to 2011. Natural gas also was up 12 percent from 2010 to 2011.

The article also reported that the reason America is producing more oil has to do with permits issued in the two year period before President Obama took office. It takes about three to five years to bring on production in oil fields.

Please follow the link to CNS News to read the entire article. There is an awful lot of smoke and mirrors in what the President is saying about his energy policies, and the article explains what the facts actually are and how the President is skewing the information.

 

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