I want you to remind you of something. It was 10 years ago. It was so long ago, John McCain was still pretending to be a conservative.
During the 2008 presidential campaign, the Republican ticket (mostly Sarah Palin) was declaring that the United States needed to take the shackles off its domestic fossil fuels resources and drill, baby, drill!
Democrats hated this idea. They still do. They hate fossil fuels. They hate oil companies. They hate the idea that America can boost its economic power and independence by extracting and producing its own fossil fuel resources. And for a guy who claims to be upset when people make fun of good ideas (as you’ll see below), Barack Obama sure knew how to scoff at the idea of domestic drilling.
Why, we didn’t need to drill! All we needed was for every American to take this one piece of advice from Obama:
Now let’s stipulate that it’s certainly a good thing to properly inflate your tires, and no one ever said it wasn’t.
But what’s not a good idea is to make policy that ignores basic realities while leaning on “if only everyone would” scenarios that seem so logical in the minds of Democrats but don’t work in real life. If only everyone would obey the law, wouldn’t need police! If only everyone would work, we wouldn’t need welfare! If only everyone would buy health insurance . . . in fact, let’s mandate that!
This is why you don’t put Democrats in charge. It’s a wonder they never got around to deputizing the tire pressure patrol.
The reality then was that we were absurdly dependent on unfriendly nations to supply us with oil, and that made no sense when we had billions of barrels under our own ground and there was nothing stopping us from exploiting it – especially with the technology to extract shale in its infancy then, and far more advanced today.
And the reality once Obama became president is that he did everything he could to prevent oil exploration on lands he could find a way to control, starting with everything owned by the federal government and extending to offshore areas on which he banned drilling just to prove his environmentalist bona fides. He also stood in the way of energy infrastructure wherever he could, most infamously when he blocked development of the Keystone XL pipeline for no good reason at all other than that he could.
Obama did everything he could to stop the expansion of the U.S. oil industry, even as he now takes credit for the domestic production boom that started in spite of him and now has been taken to new heights under President Trump.
A few weeks ago, for the first time, the United States exported more oil than it imported. Our presence has turned global energy markets on its head, and forced Vladimir Putin into the very risky maneuver of taking over Venezuela’s oil industry to try to regain the market share we’re taking away from him. I hope Putin enjoys his relationship with his new business partner Nicolas Maduro.
Oh, also: Remember when Democrats used to deride the idea of drilling by saying it would take a decade or more to impact prices at the pump? Ahem:
Fuel makers can’t stop churning out gasoline even as prices fall, a development that could flood the world with supply and put further pressure on the global oil market.
Retail gas prices across the U.S. averaged $2.33 a gallon Friday, down more than 10% from earlier this year and reaching the lowest level since August 2017. Declining retail fuel prices aren’t unusual in December, as cold weather tends to lead to a seasonal decrease, but this year idiosyncratic dynamics are intensifying that pattern and broadening its significance.
Unusually, the low prices aren’t deterring U.S. refiners from producing more gasoline. That is because the prices of other oil products such as diesel fuel and heating oil have soared, thanks to cold weather in the U.S. and new environmental regulations coming into effect in 2020 that are leading to higher diesel demand.
The increased supply has absolutely led to lower prices at the pump, despite what you were told. Also, whenever supply goes up and prices go down, we’re told that’s a disaster too! Because the lower prices will put too much pressure on producer margins.
So which is it? Is it bad when prices are high because consumers have to pay too much? Or is it bad when prices are low because producers can’t make enough money?
The answer is that both are good, because they both respond to rational market pressures. Conventional wisdom is that low prices will result in producers scaling back production, but as we see from the current dynamic, U.S. refiners see advantage in continuing to produce and have found other market dynamics that make this work.
To put it more simply, the media and most politicians don’t have the slightest idea how energy markets work, which is why they make such terrible policies with respect to energy.
I’ve maintained for some time that, apart from the tax cut and the judicial appointments, the best thing Donald Trump has done as president is to toss out Obama’s energy policies and put the emphasis on a) domestic production; and b) flooding global markets via exports. This has caused more problems for Vladimir Putin than all the diplomatic measure the political class ever dreamed of implementing, but more to the point, it’s created tremendous wealth and brought tremendous capital into the U.S. economy, while taking away our need to kowtow to bad regimes for fear they will cut off our oil.
Now we rule the oil roost, and they have to worry about making us unhappy. And you get cheaper gas in the bargain. It’s a pretty good way to live.