Essay by Eric Worrall
h/t MyUsername – According to Huff Post journalist S.V. Dáte, the USA needs to keep gasoline prices high to prevent economic ruin.
Trump Is Promising Cheap Gas. Too Bad Getting It Would Likely Crash The Economy.
Oil industry experts agree there is no way he can deliver $1.70-a-gallon gas without destroying the domestic oil industry and triggering a deep recession.
By S.V. Date
Aug 22, 2024, 08:00 AM EDT…
The problem, industry experts explained, is that energy is bought and sold in a global market, and the only way that gasoline could go from $3.40 a gallon now down to $1.70 a gallon is for crude oil prices to fall from $75 a barrel to between $20 and $30 a barrel. And at those lower prices, U.S. oil producers would not be able to break even.
“That would bankrupt the U.S. industry. And the entire U.S. industry would shut down before that happened,” said one oil executive with decades of experience who spoke on condition of anonymity to avoid antagonizing Trump and his campaign. “It’s classic Trump. He speaks hyperbolically without making any common sense.”
…
Matt Randolph, another oil industry executive with more than three decades of experience in the business, frequently posts videos on social media lampooning politicians ― both Democrat and Republican ― for their claims about energy.
In a video he posted last week following a previous instance of Trump’s half-price promise, Randolph laughed at Trump’s pledge, laying out a scenario of oil industry layoffs triggering a recession. “This may be one of the dumbest statements that Donald Trump has ever made,” he said in closing.
…
With no market mechanism to slash prices that sharply, Trump would be left with government action. “The only other way is massive subsidies to the American consumer,” Randolph said. “And that isn’t going to fly.”
…
Read more: https://www.huffpost.com/entry/donald-trump-half-price-gas-promise-recession_n_66c68217e4b01c59f9de051f
The most disturbing part of the Huff Post article is it seems an incredibly lazy piece of journalism.
Why does “S.V. Dáte” accuse Trump of planning government subsidies? There is no evidence in the article that Dáte approached Trump for an explanation, he just flew into a wild flight of fantasy about Trump pushing damaging government backed subsidies.
Dáte’s other points seem just as weak. Matt Randolph, whom Dáte quoted, seems to think there is no point producing more oil in the USA.
… Randolph: We’re currently producing 13.3 million barrels of oil a day. For 2023, we averaged 12.9. And that was a record year. So, we will set another record in 2024. But I don’t expect us to increase oil production much more this year because as we increase it, OPEC just continues to decrease. It’s hard to say what the benefit is for us to continue increasing oil production if they’re just going to maintain high prices. …
Read more: https://www.tpr.org/news/2024-04-28/matt-randolph-aka-mr-global-sets-the-record-straight-on-the-u-s-oil-and-gas-industry?_amp=true
Even if Randolph is right about prices, which I doubt, Randolph’s argument completely ignores the benefits of US businesses and workers being enriched by oil profits, instead of the money ending up in the hands of Middle Eastern oil sheiks. Improving the balance of trade by reducing outflows of US cash would also improve dollar purchasing power and reduce upward pressure on inflation and interest rates, even if pump prices didn’t come down immediately. In addition if US production rises fast enough, there would likely come a point when OPEC solidarity would crack, and producers would break ranks to try to squeeze as much profit as possible from a falling market. There is evidence OPEC’s control of oil prices and member production levels is much weaker than they like to portray.
I’m not accusing Randolph of ulterior motives, but there is a very obvious reason some big oil players might prefer Biden / Harris policies over Trump policies. Biden / Harris have passed laws which create a significant competitive advantage for big oil companies over their smaller competitors.
Only big companies with big legal and accounting departments can comfortably afford environmental compliance costs under Biden / Harris.
Texas Oil & Gas Commissioner Slams Biden Administration’s Job-Killing Oil & Gas Rules
December 05, 2023
AUSTIN – Railroad Commissioner Wayne Christian issued the following statement regarding new onerous methane rules proposed by the Biden administration’s Environmental Protection Agency (EPA).
“While costs for hard-working Americans are up nearly $11,000 this year everywhere from the gas pump to the grocery store, President Biden’s solution to inflation is to increase regulations that will make American oil and gas more expensive,” said Commissioner Christian. “Petroleum helps make more than 96% of everyday consumer items like plastics, food, medicine, and more. These new rules on U.S. oil and natural gas producers will certainly drive those prices up.”
“These new rules are likely to have a disproportionate impact on smaller producers, which make up more than 83% of U.S. production. At a time when producers are facing financial drought from Wall Street and political headwinds from Washington Democrats, that last thing the industry needs is more bureaucratic red tape stifling business,” Christian continued. “It’s hypocritical to kill clean fossil fuel jobs here in America claiming it ensures a clean environment, and then beg our foreign adversaries to produce more using much less environment-friendly methods. Americans are struggling with high prices and the answer to that strife is simple—more U.S. oil and gas production.”
…
Read more: https://www.rrc.texas.gov/news/120523-texas-oil-gas-commissioner-slams-biden-administration-s-job-killing-oil-gas-rules/
All the environmental regulations introduced by Biden / Harris may be driving financially distressed small companies into the arms of larger players, either through outright mergers, or by joining big company umbrella groups, in return for big company help with compliance. Even those small players which retain some independence under the new order may no longer feel completely free to compete and undercut the prices of big companies they rely on for protection from Biden / Harris government bureaucracy.
US oil, gas M&A activity jumped 57% last year amid industry consolidation
By Nicole Jao
August 21, 202412:21 AM GMT+10
NEW YORK, Aug 20 (Reuters) – Dealmaking activity in the oil and gas industry increased 57% last year as energy companies boosted development spending, driven by higher cash flows from profits in prior years, according to a report released on Tuesday.
Top energy companies spent $49.2 billion on mergers and acquisitions in 2023, up from $31.4 billion in 2022, according to a report, opens new tab from Ernst & Young. The increase was mainly driven by mega deals among integrated oil and gas companies.
…
Companies flush with cash were focused on driving efficiency through scale and leveraging existing operations, he said.
…
Read more: https://www.reuters.com/markets/commodities/us-oil-gas-ma-activity-jumped-57-last-year-amid-industry-consolidation-2024-08-20/
If Trump sweeps aside the bureaucracy, opens new areas for exploration, and restores full market access for lean, low cost independent operators, liberating small players to try to pull down prices, consumers will benefit one way or another. But the impact on the profits of some big energy players which have spent all their cash on buying distressed small operators could be devastating.
Instead of using their market dominance to keep gasoline prices high, pocketing fat profits squeezed from the misery of ordinary consumers, big players who have taken advantage of Biden / Harris market distortions by spending all their cash buying distressed small players could suddenly be forced to compete on a level field with lean, efficient, small scale operators who resisted the buyout spree, right in the middle of a difficult consolidation exercise triggered by all the buyouts. The fat cats might have to take pay cuts. Some of them could even lose their jobs.
Dáte could have learned all this if he bothered doing a little extra research. The fact such a sloppy piece of orange man bad journalism saw the light of day, complete with a straw man fantasy about Trump’s policy platform, in my opinion affirms the plummeting journalistic standards of what today passes for mainstream media.
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Is there a ‘Stupid Fax Blast’ (i.e. Journolist type listserv) all these ppl subscribe to?
Yes. There are several. One has “climate saving” guidance as it’s primary narrative.
their raison d’etre
Yeah, it’s called Operation Mockingbird and modernizing the Smith-Mundt act.
not directly about petroleum but our tax dollars support this non-sense
https://training.npr.org/2024/07/23/what-journalists-need-to-know-when-covering-climate-change/
The CIA called it Operation Mockingbird. Then they told everyone that they stopped all that. If you believe them, I have some beachfront property in Nepal to sell you.
Apparatchiks operate to preserve the power of apparatchiks. Regulation that only serves to appease the Green Blob, and those seeking relief from those regulations is the sort of self licking ice cream cone bureaucrats devise.
The US was energy-independent when Trump was president. Due to fracking, The US will become energy-independent again, if (when) Trump is president again. Due to fracking.
Mr. S.V. Dáte is likely a partisan polemicist. And his oil-executive authorities are either being quoted out of context, or are foolishly assuming that oil production capacity will remain artificially (politically) crippled.
A look at the Huffington Post Dáte’s essay kinked in the head-post shows all-Trump-all-the-time. Pathetic.
According to Mr Dáte’s bio, he’s “a bluewater sailor, with 35,000 ocean miles, including a two-year trip aboard a 44-foot cutter with his two sons, as they sailed across the Atlantic, through the Mediterranean and back via the Caribbean.”
Another rich garden-variety liberal, hypocritical and a political narcissist. I think he should be required by law to use biofuels for his 44-foot cutter, no matter if diesel becomes dirt-cheap.
“The US was energy-independent when Trump was president.”
The US has not been energy independent since the 1940s.
That is a conservative myth.
We import a large amount of oil, mainly from Canada and Mexico. We import natural gas too. 95% of our uranium is imported.
The US is not self sufficient for energy fuels so is NOT independent.
Why doesn’t the US use its own oil?
It’s mostly a chemistry problem. The crude oil we’re buying is thick and has lots of sulfur, hence it’s called heavy sour. The stuff we’re pulling up isn’t and doesn’t, so it’s called light sweet. “All that variation in the chemistry of the oil means that you can’t refine all oil the same way.
Your contention is that light sweet crude, which doesn’t need as much refinement, can’t be refined at US refineries. Is that what you claim?
You’re right that it’s different but please post some sources to support your contention. Because I call bullshit.
You love to claim conservative myth, conservative myth but your explanations leave one to believe you’re just making shit up to get attention.
If Justin TrueDope went rogue and cut off Canadian oil exports to the US, our refineries would have oil shortages. If we were really energy independent, we would not need any oil, gas and especially uranium imports.
I prefer the truth over conservative or leftist myths.
I challenge you to refute any facts presented in my comment.
I have the data
You have the claptrap.
please post some sources to support your contention
I challenge you to refute any facts presented in my comment.
ok then…
I have the data
Yet none is produced.
Such a common exchange.
We were a net oil exporter under Trump. That’ s FACT, not a myth. That means we produced more oil than we consumed, and therefore, if imports went to ZERO, we would still have enough oil, if export restrictions were imposed to ensure the domestic sale of all production.
What part of that don’t you understand?
US oil production passed oil consumption in 2020. Include the very large US coal reserves and the US was energy independent.
Domestically produced oil was often exported in exchange for imports to facilitate ease of delivery, e.g., cheaper to pipe Canadian oil to the US east coast and export US production to foreign markets.
Further: The United States has been an annual net total energy exporter since 2019
See the charts at the links. Net total energy exporter makes the US a net total energy independencer
An MSM trope these days is to deny any positive element of the previous Trump administration. One way to do that is to jimmy the statistics.
The US is producing more oil and gas under Biden than under Trump, they just don’t talk about it.
You are correct.
According to the EIA (https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m ) and discussing specifically US field production of crude oil in thousands of barrels per day averaged over a month, the peak production to-date was in December 2023, at 13,308.
Similarly, the EIA reports (https://www.eia.gov/dnav/ng/hist/n9070us2M.htm ) the peak-to-date US production of dry natural gas in units of million cubic feet cumulative by month was also achieved in December 2023 at 3,296,731.
Much more profitable
Due to private and state properties. The Biden/Harris administration has thrown many roadblocks to the energy companies. One of the first things Biden did was screw over energy company projects.
Not that Biden, et al., encouraged FF production. They’re pursuing their war on fossil fuels. So did Obama, et al. Part of their policy of redistributive poverty.
All exploratory fracking is on private lands.
If any essential goods get more expensive, the little people are going to suffer. If any essential goods get cheaper, Beltway Big Shots are going to suffer from a decline in self-importance, so they’ll find a way to make the little people suffer anyway.
I’ve heard/read all the reasons why gasoline prices are so varied around the world and don’t buy the explanations. There are countries that have $1.70 US a gallon now. The largest part of gasoline prices seems to be taxes. True? Just the difference between gasoline prices in Arizona and California when major refineries are located in California is nuts.
Certainly, there is plenty of gasoline in Texas and Louisiana that is below $2.50/gallon now and even one station selling it at $2.19/gallon.
Take away some taxes (federal and state), relax some blending requires and $1.70 is not that far away.
I’m old enough to remember when it was 35 cents.
Same here. Also remember 25 cents/gal – same price of a pack of smokes.
In 1972 we took a road trip from MN to CA and back. Gas in LA was 19.9. Around the same time as teens we could pool our quarters,buy a bucks worth of gas and tool around our small town for a few hours.
Yeah back then kids didn’t even need to syphon gas from the tanks of parked cars.
. . . or steal catalytic converters off parked cars.
Yes, when coinage was silver based.
. . . and before that, many US coins in circulation were actually minted in gold. Imagine that!
I learned to drive a MB 190D in 1966 when I just got my permit and diesel was 15₵/gal and the 190D got 35 MPG. Slow as molasses but it got you there in the end. BTW, that was at Little America in the middle of WY (otherwise known as Nowhere).
I remember $0.17 with a gas war taking it down to $0.12.
Man… some REALLY old folks posting today!
It was in the Detroit area in the early 1970s. I wasn’t driving yet.
Yes, $0.17 with a gas war near Hartford, CN in the mid to late 1950s.
I remember commonly seeing $0.199/gal gas wars. Throughout elementary school my mother would not buy gas unless it was $0.299/gal or less. The first tank of gas I bought with my own money was $0.849/gal (I still cannot explain why I remember that). Now here’s the really strange part… when I set out to drive to Arizona to go active duty in 1982, I paid $1.149/gal for that tank of gas. Up until 1992, I could still buy a tank of gas in Texas for pretty close to $1.149/gal, and that was after two tax increases! That’s the kind of prices we need again.
I remember those prices too. Pretty vividly remember when it broke $1, a lot of people were talking about it.
I also remember taking the car out first thing in the morning to get in line (for hours) to fill up on the day you were allowed to based on your license plate number.
The ignorant fool, S.V. Dáte, thinks having the supplies of energy in the hands of authoritarians that are determined to bring down western civilization is a good thing?
Without energy, no person or country can survive.
That seems to be the objective of the elite oligarchs and authoritarian regimes.
FKH
What do you expect? Perhaps the most disturbing thing is that anyone could confuse anything appearing the huffpo with journalism.
Could be me, but if western oil and gas produces countries stop producing and have to enter the market as buyers, we do not only have mor demand but also less supply, which automatically results in higher prices. When Western countries then also put sanctions on Russia, the price of oil and gas goes up even more.
When these countries go back to pumping up oil and gas, and use the immense reserves they have, they will leave the market again, what makes that there is less demand and more supply what will result in lower prices. Basically how it has always worked.
“keep gasoline prices high to prevent economic ruin”
indicative of extreme insanity!
You cannot fix stupid.
No nation has ever taxed their way to prosperity. High prices produce reduced economic output. Low prices stimulate economic output.
Winston Churchill said as much,”We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Cut the government-imposed red tape regulations and rip-off costs to the petroleum industry and cut the usury level taxes and the price would drop dramatically.
AND
The economy would benefit by NOT having so much capital STOLEN from the private sector by the government to throw down the toilet or damage society with the Green Raw Deal money laundering scams.
From the preceding article on WUWT
“The other candidate has sworn to cut energy prices in half, a promise which boggles the mind at the best of times, and causes cranial explosions if he’s including natural gas prices. He wants to cut those in half? See: chart above…not sure that is a well-thought-out proposal, not when it comes to natural gas anyway.”
https://wattsupwiththat.com/2024/08/24/diary-of-a-madnatural-gas-producerman/
So it appears that when a left leaning organisation makes a claim it is automatically rejected but when a right wing blogger says the same thing it passes without comment.
Stop whining.
Read your own quote, Terry is talking about natural gas prices not gasoline.
““The other candidate has sworn to cut energy prices in half, a promise which boggles the mind at the best of times, and causes cranial explosions if he’s including natural gas prices.”
The key here is the word “energy” which we have been told for decades is “free” from wind and solar sources.
Another way is to go the route of Lewis Strauss when he declared that nuclear energy, if properly deployed would make electricity “too cheap to meter”.
of course, “properly deployed” would require getting the damned government out of the way so that entrepreneurs, investors and visionaries could exploit banned or otherwise abandoned vectors of energy generation. Not saying that it is a path, but is Thorium based solutions a No Go?
From the above article’s first paragraph:
“. . . is for crude oil prices to fall from $75 a barrel to between $20 and $30 a barrel. And at those lower prices, U.S. oil producers would not be able to break even.”
Well, that statement is problematic on several accounts:
1) Breaking even can include many “bumper” expenses, not all of which are necessary to maintain or increase current and future profits, such as advertising, R&D, new infrastructure (beyond that needed to maintain existing equipment), purchasing speculative leases, excessive pay and bonuses and “golden parachutes” for top executives, speculative mergers or buyouts of competitors, etc.
2) US oil producers survived the period of Feb 1998 thru Feb 1999 with inflation adjusted prices equivalent today of $31 per barrel WTI crude or lower (a low point of $21.52/barrel WTI crude was reached in Nov 1998)
— ref: https://www.macrotrends.net/1369/crude-oil-price-history-chart
Methinks oil executives doth complain too much about their “expenses” and resulting meager profit margins.
Many predictions of a recession since 2009
Here are the facts
July 2009 to August 2024 — 15 years — had only 2 recession months — March 2020 and April 2020
The HUGE federal budget deficits used to bail out the US economy did cause a high rate of inflation in 2021 and 2022
Those deficits were passed by
(1) President Trump
(2) Republicans controlling the Senate
(3) Democrats controlling the House
Biden had zero responsibility for that deficit spending or the Federal Reserve Bank’s decision to create credit out of thin air to fund those huge deficits. The Fed chair was Jerome Powell, appointed by Trump.
US oil production is setting records under Biden, with more production on federal land under Biden than under Trump.
One recession every decade is typical, so only 2 recession months in the past 15 years is unusual.
The Inflation Reduction Act is more deficit spending, and potential future inflation, but so far the Federal Reserve Bank has been fighting recession, not causing it
February 2022
Fed starts fighting high inflation rate they caused
June 2022
YOY CPI inflation peaks at 9.1%
August 2022 \
Inflation Reduction Act signed
July 2024
YOY CPI inflation down to 2.9%
For the moment, Trump can avoid any responsibility for the high inflation rate in 2021 and 2022. And Biden can claim his IRA reduced inflation. That’s how politics works.
We never get the full story.
They haven’t spent most of the I.R.A grift yet. A lot of future inflation built in with many open ended subsidies that will end up costing multiples of their original CBO type projections. Sort of like every other spending bonanza Congress passes.
“Biden had zero responsibility for that deficit spending or the Federal Reserve Bank’s decision to create credit out of thin air to fund those huge deficits. The Fed chair was Jerome Powell, appointed by Trump.”
I love it when liars like you leave out the 800# gorilla in the room: CoVid-1984 and the lockdowns, the total destruction of the economy by the Uniparty and Blue State governments who criminalized economic activity for months, if not years.
All Democrats in office are Communists, many Republicans in office are Communists – we call this cabal of unhumans “Uniparty” since they are beholden not to We The People but more likely Baphomet or its avatar in London or Brussels.
Trump wanted to open up the economy after the “Two Weeks To Flatten The Curve” but the unhumans thought that a resurrection of the economy was way too close to the observed date of Resurrection Sunday (aka Easter) and couldn’t have that. There was also an election to steal that November and no better way than to crash the economy, pin all the blame on one man who didn’t want any of this to happen an then hope that all the laws of Economics would fail and socialist policies would result in Nirvana.
The other major lie in your statement is that Biden/Harris/Uniparty has continued to pile on deficit spending on top of deficit spending while regulating everything to death.
As for the true observation that US Oil Production is setting records under Biden is a result of the fact that oil production isn’t like flipping a switch. Otherwise can you point out a single Biden/Harris policy that results in increasing oil production?
Was it the illegal/unconstitutional blocking of Oil Lease Auctions (that SCOTUS had to step in to fix), or was it the closing of the KXL pipeline, or the shuttering of a myriad of non natural gas thermal generation? Was it the huge imposition of new regulations, taxes and lawsuits against the oil industry that spurred them to increase production?
About the only policy I could see that might have bumped up oil production was by the Biden/Harris/Uniparty decision to blow up the Nordstream pipeline forcing Europe and the rest of the planet to scramble for petroleum resources. Sanctions against foreign oil producers also tends to bolster domestic production too – at the expense of impoverishing developing nations.
But killing people and driving others into penury is a feature, not a bug for you Leftists.
Biden inherited a 6 percent unemployment rate. That’s why printing extra money and the resulting inflation was needed to spur employment to bring the unemployment rate down.
“Biden inherited a 6 percent unemployment rate. That’s why printing extra money and the resulting inflation was needed to spur employment to bring the unemployment rate down.”
How exactly does printing money, thus driving up inflation which leads to the Fed Chair jacking up interest rates, which make starting or funding a business far more difficult a sure fire way to “spur employment”?
And why lie inheriting a 6% unemployment rate? We know exactly why so many people were unemployed – THE COVID LOCKDOWNS IMPOSED BY DEMOCRATS. When you throw people in jail for the crime of going to work, you create this problem called “unemployment”.
And I surely can’t expect TDS political hacks to look at the pre-Covid unemployment rate, nor understand that the unemployment rate needs to viewed in light of labor participation data.
And also believe that the BLM isn’t yet another weaponized political agency providing cooked numbers for political gain.
Left unsaid: after the COVID-19 pandemic struck the US (ca. January 2020), the US unemployment rate soared to a peak of 14.7% in April 2020.
“Biden inherited an unemployment rate of 6.7% — higher than the historical average — but the rate had been declining for months as the worst effects of the pandemic ebbed.” (source: https://www.factcheck.org/2023/08/biden-cherry-picks-unemployment-record/ )
Note that in an update (https://www.factcheck.org/2024/01/bidens-numbers-january-2024-update/ ) there is the statement: “The unemployment rate fell from 6.4% at the time Biden took office to 3.4% in January 2023 . . .”
(my bold emphasis added)
What was needed to spur employment was not so much the US spending more money, but the gradual removal of the completely unnecessary and economically devastating COVID-19 lockdown measures implemented courtesy NIAID’s Dr. Anthony Fauci, NIH and the CDC.
Early on somebody (Maybe the “Population Bomb” guy?) said that the worst thing that could happen for the World would be cheap, abundant energy.
I can’t find the quote.
Maybe somebody else.
(I think it predates the CO2 and Global Warming scare.)
Club of Rome clowns were singing that tune in the 70’s. Their opus was titled “The Limits to Growth”. One of their functionaries was an alumna of the college I attended in MN. They had a conference there in ’75. As a naive 20 yo I was buying what they were selling at the time.
I too was an example of the adage that –
“If you’re not a socialist at 20, you haven’t got a heart.
If you’re still a socialist at 40, you haven’t got a brain.”
Yeah, the Club of Rome “experts” were so puffed up by the perceived importance of their dire predictions that none bothered to consider the simple, known facts surrounding negative feedbacks and the basic reason for S-shaped growth curves.
Much to their bitter ending up in the dustbin of history.
But I bet that he is happy for the cheap, abundant energy that he uses every day, the flaming HYPOCRITE!
I think I found it.
“In fact, giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun. With cheap, abundant energy, the attempt clearly would be made to pave, develop, industrialize, and exploit every last bit of the planet—a trend that would inevitably lead to a collapse of the life-support systems upon which civilization depends.”An ecologist’s perspective on nuclear power”, Federation of American Scientists Public Interest Report vol. 28, no. 5-6 (May-June, 1975), page 5.Paul R. Ehrlich
(There may also be a similar one out there.)
Side note:
I thought Obama “science guy” had said it. He didn’t. But Holdren was a co-author one of Ehrlich’s papers.
Ehrlich, famous for making many predictions, all of which have failed.
Paul Ehrlich, also known as “the man who got everything wrong”, made an incredible number of alarming and flat out wrong predictions (ref: https://www.noahpinion.blog/p/why-paul-ehrlich-got-everything-wrong ), among them:
— that 65 million Americans would starve to death in the 1980s
— that England would cease to exist by the year 2000
— in 1975, that more than nine-tenths of the original tropical rainforests will be removed in most areas within the next 30 years or so (i.e., by 2005 or so), with the attendant expectation that half of the organisms in these areas would consequently vanish
— that most of the people who are going to die in “the greatest cataclysm in the history of man” have already been born (issued in 1969, some 55 years ago which is very close to the worldwide life expectancy of humans at the time of that prediction: 56 years!)
“Wherefore by their fruits ye shall know them.” Bible, Matthew 7:20.
Washington State has a “Carbon Fee” and a gas tax that combined bring regular gasoline to over $4/ gallon. There is $4.36 in Seattle and $4.18 state average.
If Trump is talking about Wholesale Price of Fuel, it isn’t all that far from reality. Current price of Gulf Coast gasoline is $2.22/gal, so all that needs to be done is drop crude by about $10-$15/bbl to about $60/bbl. That is hard to do in a global market, but solving supply issues would do it.
Spot Prices for Crude Oil and Petroleum Products (eia.gov)
All the data needed to understand current pricing of crude and fuels is at the DOE EIA link above. Keep in mind that all fuels are commodity products traded openly. Pricing is well known. What people don’t pay attention to is the taxation that goes into fuels. Both direct taxes by states and Federal Excise Tax, and hidden taxes (usually called fees or the like) such as the Low Carbon Fuels Standard in CA and other states, and the nationwide Renewable Fuels Standard which subsidizes Ethanol and renewable diesel production. These programs at at least $0.50 to the base cost of gasoline/diesel outside CA, and more than that in California. Also CA has some of the highest state taxes in the country. No wonder CA gasoline is $4-5/gal and higher in some places. This is not price gouging by fuel producers, but the result of onerous taxation for political and social engineering goals.
Achieving 50% of that “promise” would be considered a major victory everywhere that the locals did not raise taxes to compensate.
Am I missing something? The main point is that the industry can’t survive 20-30$ a barrel prices. The point still stands. And that small mom & pop operators can compete with the big ones because they are “lean”…that would be quite the unicorn industry where this is possible. Abandoning regulations would benefit the big ones all the same. The only one loosing is the population that has to live with the fallout.
He doesn’t accuse him, he says that’s the only way possible. Quite a difference. Because – as is still undisputed – the industry can’t survive 20$.
/blink/
Dáte never bothered to ask Trump what he had in mind. Neither did I to be fair – but I at least based my assumptions on things Trump has said, about rolling back environmental regulations and opening more fields for exploration.
As for the $20 / barrel price, Randolph never showed his working out. This price seems ambitious, but who knows what tomorrow’s innovation will bring. Production prices in everything are falling all the time. Some of the recent innovations in other sectors, such as farmers using AI robots to “recognise” weeds and spray them selectively, saving billions of dollars in agricultural chemicals, offer hope there is a lot which can be done to reduce costs in the oil industry.
Creating a market which encourages innovation, rather than a market which is taxed and regulated into the ground, along with a skyrocketing national debt to shake confidence in future prospects, could produce the innovation required to produce such prices and still make a profit.
And let’s not ignore the benefits of a better balance of trade. If the US Dollar is stronger, each dollar will buy more stuff – oil price in US dollar terms would fall dramatically if the value of the US dollar was to rise, say in response to economic growth.
The $ price of something is in large measure a function of the general rather than of the specific since there hasn’t been any actual dollars around for a long time.
“loosing”?
And as such, the useless idiots aka hypocrites that complain about FF usage while benefiting from it’s use are using the wrong tactic. Government intervention isn’t needed at all. The only thing ALL THOSE ECONUTZ need do is stop using any FF related product or energy sources. IF there are so very many like minded ECONUTZ that stop using FF, the lack of demand would force down the price to a point where any extraction would be unprofitable for even the largest producers.
Any ECONUT takers?
Chirp, chirp, chirp…crickets!!!
Well said Bryan.
As I keep telling the luser..
… everything in its pitiful ghetto existence is there BECAUSE OF FOSSIL FUELS.
It would never consider “doing without” the massive benefits and products derived from fossil fuels.
Oh dear.. is the reaction to your story tip not the one you expected? Yes, you are clearly missing something..
This can only come from the mind of someone who perceives Government as an omnipotent god:
“Oil industry experts agree there is no way he can deliver $1.70-a-gallon gas without destroying the domestic oil industry and triggering a deep recession.”
What is any political leader supposed to do? Wave a magic wand and global industry automatically self-enforces price ceilings? If a process can’t conjure up $1.70/g fuel, the $1.70/g fuel will not magically appear. Inflating the Federal Reserve Unit by injecting a trillion more of them every quarter year is not the path to $1.70/g fuel.
On the other hand, $1.70 is being expressed as a fiat currency, and an act of Congress could go ahead and reprice the dollar by converting current paper dollars into a New Dollar, treating the original Federal Reserve Note as its own currency and making the New Official Constitutional Dollar something priced according to Au and Ag.
I expect the return of the LORD before that happens. The idea though that anyone could belch our an order to Make Gasoline $1.70/g Again and your average person could wander down to the nearest fuel pump and see that price is insane, childish and cultish all wrapped up in a demented psychosis, or as some might express it as S.V. Dáte.
Seems to be a whole lot of folks who know a lot less about economics than me. The author of the Huff Post article seems to be one of those. Or, he is so deranged as to being blinded by the climate cult ideology making fossil fuels the villain in the false claims of “climate crisis”. Probably a mix of both with emphasis on the latter.
MAGA.
It seems to me that if the US oil companies can’t sell their product at a profit, they will just leave it in the ground until it’s profitable again.
Meanwhile, the price of energy affects the price of everything. Reduce the price of energy, particularly oil and consumer prices will follow. No “price gauging” controls needed.
Yep. SO many folks disregard the importance of low energy prices to the benefit of the economy (all around).
Didn’t Trump prove this works to all the same naysayers 4 years ago?
Before Trump was elected, President Obama said, “We can’t drill our way to lower gas prices.” He was proven wrong.
Obama: Can’t Drill Our Way to Lower Gas Prices (youtube.com)
Leave it to Lusername to recommend an absurd article.
It’s the old fallacy of ceteris paribus (all else being equal) that fools that fool over and over again.
While it might be true that the price of crude oil implied by $1.70/gallon gasoline may be $30/bbl, first of all, Trump should at all times be taken seriously, not literally. It isn’t necessary for the number on the gas pump to be 1.70. What matters is that the number is a certain fraction of the average person’s hourly wage.
Secondly, there isn’t some immutable cost of extracting oil from US fields. Surely the cost of extracting oil is dependent on many things. The cost of onerous regulations designed to ‘end fossil fuels’ springs quickly to mind.
Thirdly, the dollar has lost over 20% of its value under the Brandon-Commie-la administration. So if oil is sold on the international market denominated in USD, the price has gone up proportionately just to adjust for that devaluation. If the dollar were to strengthen, that process reverses without substantially impacting the costs of production for domestic oil fields.
Fourthly, as mentioned, when more US citizens are gainfully employed instead of collecting government payments borrowed from their grandchildren, the overall prosperity of the country improves. That goes to my comment that it’s not the arbitrary number “1.70” that matters, any more than we need it to be “0.25” as it was in my childhood.
Username has a purpose in life – comic relief.
The absurdity of his references and statements is kind of like having the village idiot around.
It is sad and funny at the same time.
Drill, baby drill, is the answer to reducing world prices of crude oil and to refill the strategic oil reserve, which was raided by the cabal controlling Biden for selfish political purposes
Cackling Harris and her serial liar/embroiderer Walz will be controlled in the same way
While lower oil prices would slow increases in domestic production, they would have a greater effect on the high-cost producers, notably Russia. Let’s try it and see.
Is there some inside joke about using the malapropism “price gauging” instead of “price gouging”?
Price gauging (or gaging) would be a method of measuring prices. Price gouging is the communist term for prices adjusting to balance supply and demand in a functional market.
If it’s a reference to some Commie-la mistake then let me advise that it’s too obscure. If you don’t realize that you’re misspelling it, then please note the definitions above.
In her economic speech, harris said ‘price gauging’ instead of ‘price gouging’. Seems she can’t read a teleprompter, either.
Journalism???? Since when? msm ‘commentator’.
To keep rising prices in check we will increase costs until prices come down!
Don’t listen to these guys they are probably the same people who have a problem with a greening earth.
Don’t listen to these guys. They are quacks.