Say, Whatever Happened To ‘We Can’t Drill Our Way To Lower Prices’?

Obama pushing for climate treaty at COP21.

Obama’s priority was lowering temperatures, not lowering oil and gas prices.

Last week Royal Dutch Shell told investors that it expects oil prices to be “lower forever.” We’re still waiting for all those people who were only recently complaining about higher-forever oil prices to admit their mistake.

It wasn’t that long ago that President Obama was mocking Republicans for their “three-point plan for $2 gas: Step one is drill, step two is drill, and step three is keeping drilling.”

He went on to say that “the American people aren’t stupid. They know that’s not a plan.”

Renewable energy, he said, was the only way to solve the “problem” of high oil prices.

And he kept pushing for new taxes on “old” energy to support federal subsidies for the energy supplies “of the future.”

Of course, Obama wasn’t the only one. There was endless talk about how Big Oil was making obscene profits while gas prices skyrocketed. There were calls for investigations into collusion among oil companies. Some wanted to bring back the Jimmy Carter-era “windfall profits tax.”

Turns out drill, baby, drill was exactly what was needed.

Domestic oil production was skyrocketing even as Obama made those remarks — thanks to advanced drilling technologies that have opened up vast new domestic supplies to production.

The Energy Information Administration projects that next year, U.S. oil production will average almost 10 billion barrels a day, which would beat the previous record of 9.6 billion in 1970. What’s more, a quarter of this production is coming from one oil field: the Permian Basin in West Texas.

Those “obscene” industry profits? They’ve fallen as well. ExxonMobil’s revenue in 2016 was about half what it was in 2011. In its most recent quarter, the company earned $3.4 billion — or 78 cents share. In the same quarter in 2011, it earned $10.7 billion, or $2.18 a share.

Oil companies for a time even had to borrow money to pay dividends.

Low oil prices have also led to a sharp drop in the taxes paid by the industry to the federal government. In 2016, the federal government collected about $6 billion in royalties, rental costs, and other fees from oil production on federal lands. That’s down from $14 billion in 2013.

Now Shell is saying that it’s bracing for low oil prices forever.

It was President Trump, not Obama, who had it right when he said that the idea of perpetually high energy prices “was all a big, beautiful myth.” The U.S. he said, “has near-limitless supplies of energy in our country.”

Even if the current oil glut causes some pain to the oil industry and crimps tax revenues, it is good news for the economy, since lower energy prices reduce the cost of doing business across the board, and make the U.S. a more-attractive place to do business on a global scale.

But it does raise some important questions: Where are those people who were screaming about Big Oil? Why aren’t they being asked to explain how they could have been so wrong? And just who, exactly, was being stupid?

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Comments (5)

  • Avatar

    Al Shelton

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    It is clear that the more we hear about Obama, the worse it gets.
    He was/is a total fraud. IMHO

    Reply

  • Avatar

    Spurwing Plover

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    Now if we had some way to use Obamas lies and the hypocricy of Al Gore Leonardo DiCaprio and their fellow Eco-Freaks and the lies from the Communists News Network(CNN)we could use it as energy to run the big Rotten Apple for years

    Reply

  • Avatar

    G

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    OP Title:
    “Say, Whatever Happened To ‘We Can’t Drill Our Way To Lower Prices’?”

    Yeah, but it sounded so beautiful rolling off the Golden Orator’s marvelous tongue.

    Energy independence is clearly within America’s grasp and the eco-left wants the opposite – there is now no place for them to hide their true intent. Before socialists can rule, they must first tear down.

    Reply

  • Avatar

    Gary Nydegger

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    The correct EIA number is 9.6 million barrels of oil per day and next year 10.0 million barrels of oil per day roughly doubling the USA oil production numbers for the last 10 years WITHOUT the government. The beauty of capitalism is that it is competitive and there will be winners and losers hopefully not picked by the government. During this production increase, several companies have been merged or bought out as they had too much debt or they picked the wrong area…like Shell. Companies management can make bad choices.
    The USA is NOW ALSO awash in natural gas which lessened the refined No.2 oil fuel business, converted over a hundred coal-fired power plants to natural gas and idled most of the coal mines for a period of time, some forever, made solar & wind essentially uneconomic unless our government heavily subsidizes and also put the natural gas out of business as we found too much! This cleaner burning fuel also allowed the USA to meet clean air standards unlike the other members of the G-20. Hence good-bye Paris Accords.
    Due to FOSSIL FUELS providing electricity, refrigeration and transportation of food along with better nutrition, medicine & health the world’s standard of living has increased tremendously and life expectancy has increased from approximately 50+ to 80+ years over the last 125 years. Go to a grocery store and LOOK at the variety & quality! That food was grown by farmers and ranchers competing for your business at great prices.
    The USA is now building it’s first large refinery (55,000 BOPD) in 40+ years.
    It has a great mix of energy sources and with standardized nuclear power plants could go several hundreds of years beyond the ~50-year range we are now blessed with. The oil boom was a technological breakthrough of not only horizontal drilling but also fracking in horizontal laterals that are 2,000 to 10,000 feet long. The US Department of Energy budget under Jimmy Carter was about 80% nuclear and confronting the nuclear waste problems. We were told as citizens to get ready to survive the global cooling problem.
    Get the government out of energy, health, education, transportation, banking & finance and turn the capitalist system loose and we might have a pretty good republic here and keep feeding the world…we will need fewer politicians and bureaucrats but we can make room for them in the private sector. Oh yeah, we cut our energy per capita (more efficient) in there someplace too!

    Reply

  • Avatar

    Spurwing Plover

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    Obama/Napoleon at the Useless Nations or where ever to oink to he fellow hawgs(Animal Farm)on how to keep us lower creatures controled through lies and fear

    Reply

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