Skip to comments.Goodbye, OPEC
Posted on 05/01/2018 12:51:15 PM PDT by Kaslin
I have argued many times on these pages and elsewhere that the shale oil and gas revolution is the story of the decade. Since 2007 U.S. oil and gas output has risen by about 75 percent, and the renaissance is still in its infancy stages.
This year the surge in domestic energy production has further accelerated, in part due to higher world prices for oil (approaching $70 a barrel) and to massive drilling operations in rich oil patches, such as the Permian Basin in Texas and the Bakken shale in North Dakota.
The Energy Information Administration reports that the U.S. could surpass Saudi Arabia in oil and gas by the end of the year. With massive oil and gas shale reserves, we could be No. 1 in the world before the end of the decade.
The Wall Street Journal confirms that U.S. oil production "is expected this year to surpass Saudi Arabia's" and that we will rival Russia for No. 1 in the world. American production will rise to almost 11 million barrels a day, the most ever in American history. Doesn't it seem like yesterday when the left was running around shrieking about "peak oil"? More like peak idiocy.
Last week Reuters argued that the American shale boom should be called "Donald Trump's Revenge." The story reported that U.S. oil "now floods Europe at the expense of OPEC and Russia." Couldn't have happened to a couple of nicer guys. America is now selling more than a half-million barrels a day, thanks in no small part to the end of the oil and gas export ban in 2016.
What all of this means is that we are getting very close to the day when America returns to becoming a net exporter of oil. This would reduce our trade deficit by more than $200 billion a year. Saudi Arabia is still a major player in the market that can move the world price by turning on and off their spigots. The recent spike in gas prices to more than $3 a gallon is due to Russia and Saudi Arabia's production cuts. But the OPEC nations can no longer hold the world hostage, as they did in the 1970s when we had gasoline lines and price controls and had to bow to the Saudi oil sheiks.
What a difference a president makes. Trump has been all in on encouraging fossil fuel production. He's freeing up federal lands in places such as Alaska for drilling, allowing permits for new pipelines and relaxing some of the anti-fracking regulations that were enacted in the Obama years. As Harold Hamm, the CEO of Continental Energy, which owns much of the Bakken shale in North Dakota, recently told me: "It makes a big difference when you have a president who actually likes your industry."
One idea that is floating around on Capitol Hill now is to use the royalties and lease payments from drilling on federal lands to reduce the trillion-dollar annual budget deficit. This is essentially free money to Uncle Sam, and by some estimates these payments could exceed $1 trillion over the next decade. Why not?
Only a few years ago, Barack Obama told the nation that we "consume 20 percent of the world's oil, (but) we only have 2 percent of the world's oil reserves." He was only off by well more than an order of magnitude on our nation's share of world supplies.
Trump has always had a much more optimistic and realistic worldview. He says he wants to "make America energy dominant," and after a little more than a year of his presidency, we are on our way.
Just ONE of the reasons the Left hates President Trump.
He makes them out to be liars and fools...................
Drill Baby, Drill!
This is great news, but it must tempered with a dose of economic reality...
We still need to import more than 40% of the oil we use each day.
Moreover, what good does it do to export oil if it keeps the supply down and the prices up in the US?
“Drill, Baby, Drill!”
Palin was Right.
Price per barrel = $67.43 today.
5 year range...
Logistics... whoever has the oil source nearest, wins the bidding.
I can hear him laughing the whole time he is writing this.
The guy is funny as hell to listen to...
Or with shale, cook baby cook.
Whiskey River, don’t run dry...
Yes she was.
Yes, the most important thing to happen to the US during the Obama Administration happened in spite of Obama’s best efforts. What a great President.
Good Bye OPEC and Don’t LET DOOR Bang You in the BEHIND!!!
Which is a fact. They are liars and fools.
Maybe the U.S. should now be chairman of OPEC.
Re: “What good does it do to export oil if it keeps the supply down and the prices up in the US?”
Sorry, I disagree.
When the USA exports oil, it just means that the specific oil in a specific geographic location can be exported at a higher price (most likely to Europe) than it can be sold in the USA.
The oil we import - mostly from Mexico and western Canada - is cheaper than the oil we export, primarily because of transportation costs and proximity to local USA markets.
There are a lot more promising areas to drill and frack too. If our production keeps rising at 12-15% per year, we are going to be able to meet all of our own needs in just a few years.
So why is gas she high?
So with this surge of shale products, why are our gas prices surging?