Oil - The Great Equalizer

by: Mark J. Grant

Balance the budget? Stop terrorism? Pull the rug out from under Russia? Re-shape the Middle East? All of this can be done, and can be done by the United States, without military force, and the epicenter of all of this, is oil.

Our oil policy has been lousy and, if not lousy, then it has been worse than lousy. For decades America was stuck with being dependent on foreign sources of oil. Ten years ago, in the Wall Street Journal, there was a story, every week, that the world was running out of oil. "Woe is me," was at the heart of every article.

Well, I am happy to report, there is no "Woe" now!

When we think about technology we point to smart phones, computer chips, artificially intelligence, self-driving cars and the like. Scarcely a thought occurs, or a mention made, of perhaps the greatest technological advance of the last decade. It occurred in the United States and it is our shale oil production. Fracking, re-fracking, horizontal drilling, hydraulic fracturing and literally, and quite positively for the United States, American oil technology has changed the world and has the potential to change more of it.

Now, in my view, it is just a question of having our political system, and our military establishment, catch up with America's vibrant new possibilities and utilize them to our advantage. We have not done this yet and, in my opinion, we need to get going!

We are slacking.

There are fifteen variations on the theme, but the heart of it is that we should tax imported oil and give tax credits for exporting oil and provide additional tax credits for American oil companies engaged in research and development. We are the world's largest importer of oil and yet we are also, now, the biggest owner of oil reserves on the planet. There is something very wrong with this picture.

Bloomberg reports that,

Exports to the U.S. will drop measurably,' Energy and Industry Minister Khalid Al-Falih told reporters after chairing a meeting between OPEC and other major producers in Vienna on Thursday. Saudi crude shipments to the U.S. will fall below one million barrels a day next month, said two people briefed on the kingdom's oil policy, a reduction of more than fifteen percent from the average, so far, this year.

This should be our wake-up call. We need to throw our domestic oil production into high gear so that we are not just oil self-dependent but so that we become the biggest exporter of oil to the world and replace the often hostile intentions of OPEC, and their producing nations.

We can do this, and we should do this!

This is one aspect of the picture. It is not just cost, however, but increasing America's production that should be the key to our strategy. The United States can be the dominant oil exporter if we just put our minds and our taxes and our regulations in the correct place.

You see, as exemplified below, the difference is that America is not supporting our government or our social programs from oil and natural gas. This is the striking difference between America's position and the financial position of the OPEC producers and Russia. This is where we can turn up the heat and the heat, in my view, should be turned up and as rapidly as possible.

We can break the backs of the OPEC nations, many of whom are funding terrorism. We can improve our oil technologies further, and bring down our costs. We can start supplying Europe with oil and natural gas and cut their dependence on Russia. We can balance our budget and even, possibly, start cutting the budget deficit, if we expand our oil production and start exporting oil and natural gas to the world. We can change the balance of power in our favor. Let's provide a meaning to the slogan.

"Make America Great Again."