OPEC Oil Production Cut And Donald Trump: Why Higher Gas Prices For You Might Please Future President Trump
According to NPR, an agreement for an OPEC oil production cut was reached today between the various member states. While the result will almost certainly be higher gas prices for Americans, Donald Trump should be quite pleased with this outcome.
Is OPEC Setting The Oil Markets Up For A Big Surprise? https://t.co/dQuj2mnNAf
— Luxury (@Luxury_etc) November 30, 2016
Donald Trump and OPEC
Oil production in the United States varies depending on the price of imported oil. Not that long ago, higher oil prices meant gas was over $4 a gallon across much of the United States. This led to a fracking boom in many parts of the country – and particularly in North Dakota.
Yes, there were jobs aplenty for those carrying out this environmentally unsound practice for extracting dinosaur-based energy. But it’s more than a cliche to say that all good things – or in this case bad things – must come to an end.
#Fracking is going bust in North Dakota.
The state dropped its tax rate but a tribe there is fighting for its share.http://t.co/oLlfDwnwjj— Tim Ream (@ourcarbon) July 16, 2015
Thanks to the glut of oil on the market caused by unrestrained OPEC oil production since 2008, the price of oil eventually dropped enough that fracking is no longer quite as profitable for the oil companies as it was before. Instead of hiring new workers, the oil companies started laying them off.
But despite the fact that lower oil prices weren’t exactly helping the OPEC nations either, OPEC oil production continued unabated – with the OPEC member nations unable to reach an agreement to reduce this oil glut.
GET READY FOR HIGHER GAS PRICES.
OPEC clinched a deal to curtail oil supply, confounding skeptics as the need to… https://t.co/K17pC4qpYy
— Dan Goodwin (@kjbevangelist) November 30, 2016
The result has been a much lower per barrel oil price and – consequently – lower gas prices here in the United States. There is so much oil on the market now that the average price for a gallon of gas is currently $2.15.
But with OPEC’s oil production agreement of today, they – and particularly the Saudis – will begin reducing their oil output. Thus, the mysterious mechanics of market forces will have worked in Trump’s favor, allowing the expansion of homegrown oil production he and his energy/oil company cronies so desperately want.
Trump's #climate plan: add fuel to the fire | @DahrJamail @truthout https://t.co/DiQ6TGOFrC #globalwarming #ActOnClimate pic.twitter.com/y1ONQUp3wW
— climatehawk1 (@climatehawk1) November 25, 2016
The supply of oil on the market will tighten, demand will force prices up, and fracking operations in North Dakota and elsewhere can kick back into full gear – regardless of any piddling environmental concerns. Not that Donald Trump believes in global warming anyway.
Trump’s possible choices for secretary of energy – former utility executive James Connaughton and oil company magnate Harold Hamm – will certainly be pleased. Yes, the rest of us will have to put up with high gas prices, but it’s a small price to pay to keep Oklahoma oil barons happy.
OPEC's deal to cut production meant billions for an energy executive who's advising Donald Trump. Here's a chart. https://t.co/YKU5hSTvyr
— Dave Wilson's Archive: Chart & Stock of the Day+ (@TheOneDave) November 30, 2016
A Real Alternative to OPEC Oil Production
When Donald Trump made his promises during the 2016 election campaign about bringing jobs back to the United States – including coal and oil production – it’s surprising he didn’t promise to bring back the steam locomotive and the pony express as well, since they are only slightly more antiquated than using fossil fuels in the 21st century.
For example, Germany – as pointed out by Bloomberg – gets more than 30 percent of its electrical needs supplied by solar, hydroelectric, biomass, and wind power, while the United States is still virtually in the dark ages when it comes to renewable energy production. And Donald Trump has made it clear with his plans for deregulating the oil and coal industries in the United States that he plans to keep it that way.
Fracking America Great Again
Of course, when the jobs – at least temporarily – return to America’s fracking fields, Trump will take political credit for having brought these jobs back. What Donald Trump won’t take credit for is the resulting groundwater contamination and occasional man-made earthquake. He’ll have made America great again, so nothing else will matter.
The fact that supply and demand market forces and arrangements between OPEC nations – most of whom Trump doesn’t even like – were the actual instigators of his 19th-century style oil and coal boom will be ignored by the preening and gloating Trump administration.
[Featured Image by Justin Sullivan/Getty Images]
