The best Christmas/New Year’s present that many Americans received this year was low gasoline prices. The price at the pump today is $1.89 a gallon in many states when last year it was twice that high at $4 a gallon in many areas.
Meanwhile, oil prices have fallen from $105 a barrel in the summer of 2014 to hovering at $35 a barrel today. That’s a two-thirds reduction in the price and the biggest factor is shale oil brought to you by fracking. Not only is gas now less than $2 a gallon in many areas, but it could fall further in the weeks ahead.
The falling price means, of course, an expanded supply. Barack Obama sure had this story dead wrong. He thinks we are running out of oil.
In a 2008 speech in Lansing, Michigan, presidential candidate Obama was all doom and gloom about oil, advising: “We cannot sustain a future powered by a fuel that is rapidly disappearing.”
Then in 2010 from the Oval Office he solemnly declared: “We’re running out of places to drill,” and he jeered that the oil and gas industry might want to start pumping for oil near the Washington Monument.
During a 2011 Weekly Address he referred to oil and gas as “yesterday’s” energy sources.
Then during a speech at Georgetown University, he pontificated: “The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource (oil) that will eventually run out.”
By the way, this discredited Malthusian belief that we are running out of oil is widely believed by many scientists and pundits as well. Paul Krugman of the New York Times wrote in 2010 that “the world is fast approaching the inevitable peaking” of global oil production and that “world commodity prices… are telling us that we’re living in a finite world.”
That was when prices were abnormally high. So if high prices tell us we are running out, then obviously low prices must tell us supply is rising.
These stupid predictions of the end of oil have been going on for most of the last century. Just over 100 years ago, the U.S. Bureau of Mines estimated total future production at 6 billion barrels, yet we’ve produced more than twenty times that amount. In 1939 the Department of the Interior predicted U.S. oil supplies would last thirteen years. I could go on.
The wonder is that smart people like Nobel prize winners Krugman and Obama haven’t learned anything from history and instead keep regurgitating these myths about “running out.”
They should be required to read Julian Simon’s The Ultimate Resource.
The folks at the Institute for Energy Research recently published a study showing three data points: first, the government’s best estimate of how much oil we had in America 50 years ago.
The second was how much U.S. oil has been drilled out of the ground since then. And the third is how much reserves there are now. Today we have twice as many reserves as we had in 1950. And we have already produced almost ten times more oil than the government told us we had back then.
By the way: we have four times more than we thought 100 years ago.
How is this possible? Technology and innovation account for the constant upping of the amount of “finite” oil we can produce. We discover new sources of oil much faster than we deplete the known amount of reserves and so for all practical purposes, oil and natural gas supplies are nearly inexhaustible. Fracking is the latest game changer and the access it gives us to shale oil and gas resources has virtually doubled overnight. And this technology boom in drilling is just getting started.
My point is how absurd it is for Americans to blindly trust any “scientific consensus” on any of these natural resource or environmental issues. The credibility of the alarmists is just shot. In 1980, hundreds of the top scientists in the United States issued a report called The Global 2000 Report to the President which was a primal scream that in every way life on earth would be worse by 2000 because the world would run out of oil, gas, food, farmland, and so on.
Lately, even Obama doesn’t make the ridiculous claim that we have to use green energy because we are running out of oil.
Instead he now says we should keep our super-abundance of oil “in the ground,” even as he tries take credit for the low prices.
In reality, if we do what Obama wants, gas at the pump and electricity are going to be more expensive. If you don’t like $1.89 gasoline at the pump, you’re probably a big fan of the Obama energy/climate change agenda.
Hopefully, the neo-Malthusians like Obama will stop resorting to the century-long false fear that we are running out of oil as an excuse for using much more expensive and much less efficient “green energy.”
Maybe we should use green energy when we run out of fossil fuels… in 500 years.