May 2, 2018

WINNING: Goodbye, OPEC: America Is on the Way to Energy Dominance.

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.”

In other words, “Get the hell out of my way!” as the wise man once said.

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