Crude oil prices have dropped from $105 to $80 per barrel and regular gasoline at the pump with 10 percent ethanol has dropped from more than $3.00 to less than $2.50 per gallon locally.
The reason for the price drop is not due to manipulation by the Obama Administration to make things look better before the election, The price drop has occurred despite Obama Administration energy policies.
Stephen Moore, chief economist for the Heritage Foundation, explains in a recent article
that originally appeared on FoxNews.com that “America has become in the last several years an energy producing powerhouse.”
Moore said the increase in energy production is not the result of the Obama “green energy” initiatives.
He said prices are falling because of “changes in world supply and world demand.. Demand has slowed because Europe is an economic wreck. But since 2008 the U. S. has increased our domestic supply by a gigantic 50 percent. This is a result of the astounding shale oil and gas revolution made possible by made-in-America technologies like hydraulic fracturing and horizontal drilling. Already, thanks to these innovations, the U. S. has become the number one producer of natural gas. But oil production in states like Oklahoma, Texas and North Dakota has doubled in just six years.”
Moore said producers in this country are just skimming the surface of our superabundant oil and gas resources. He reported that new fields have been discovered in Texas and North Dakota that could contain hundreds of years of shale oil supplies. The increase in U. S. oil production is “breaking the back of OPEC.” Moore said. “Saudi Arabia is deluging the world with oil right now, which is driving the world price relentlessly lower.”
Moore concluded that the increase in U.S. oil production could make energy cheaper for decades to come, and that we will soon overtake Saudi Arabia as the dominant player in world energy markets. “You can’t have a cartel if the world’s largest producer – America – isn’t a member.”
Looking ahead, Moore suggested: “Think of how much bigger the revolution could be if we started building pipelines, repealed the ban on oil exports, expanded drilling on public lands, and stopped trying to punitively tax and regulate the oil and gas.”