Grid Brief: White House Humiliates Itself With OPEC+
My friend Emmet Penney runs an excellent daily energy newsletter called Grid Brief. I highly encourage to you subscribe to it by clicking here. The piece below is from the…
OPEC used to to be the most influential cartel in the world.
Even if the general public didn’t know that OPEC stood for the Organization of Petroleum Exporting Countries, they were keenly aware of the power this group held to raise, or lower, oil prices, and what impact gas prices had on their families. But many people don’t realize the power of OPEC is withering under the onslaught of American oil produced on American soil.
America’s surging oil production is so disruptive to the cartel that the Middle Eastern nation of Qatar has announced it will leave the organization in January. This will mark the first time a Middle Eastern nation has ever left OPEC, and many other OPEC member nations are openly questioning whether it makes sense to remain in the cartel.
Spoiler alert, it probably won’t.
OPEC is headed by Saudi Arabia, which is by far the world’s largest exporter of oil, but it is no longer the top producer. That mantle now belongs to the United States, and the abundance of domestic energy has greatly reduced OPEC’s ability to keep oil prices high.
Furthermore, unlike wind and solar, fracking is not a fad, and the United States will be an energy powerhouse for decades to come. Recently-released data from the Energy Information Administration show that U.S. crude oil and natural gas reserves are the highest they have ever been.
Many people are probably, and understandably, confused by this fact, but oil and gas reserves are not a total estimate of how much oil or natural gas is in the ground, they are calculated based on how much oil or gas can be produced based on today’s prices and today’s technology.
This means we will not “run out of” oil or natural gas for a very very long time.
While other OPEC nations remain in the organization, their importance on the global stage has plummeted. Just look at oil production in Venezuela, which now only produces half of the oil they did in 2010 and 2011, due to gross mismanagement of their domestic oil industry, and lower oil prices that are the direct result of American oil production.
American oil and natural gas production should be celebrated by Americans of all stripes and political persuasions. It employs tens-of-thousands of people in high-paying jobs, makes the United States less dependent upon countries we may not get along with, and it is also a boon to human rights around the globe.
Look at the map of the world’s top oil producers. Which of these countries care more about rights for women and minorities or environmental justice than the United States?
I will guarantee you it’s not Saudi Arabia, where women are only now allowed to drive and their economy is supported by immigrants who are badly mistreated.
What about the environment? Here in Minnesota, Line 3 pipeline protesters want to stop the construction of a newer, safer pipeline that would reduce the need to import oil from Russia and Saudi Arabia, and substitute this oil with crude from our friendly, environmentally responsible neighbors to the north.
The bottom line is American oil and natural gas production, which has surged thanks to fracking, is undermining the power of corrupt foreign dictators while at the same time lowering the cost of filling up our gas tanks and putting people in the United States to work.
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