Drill, Baby, Drill Was An Effective Strategy

Liberals universally mocked when conservatives argued for more domestic drilling to increase oil and gas supplies, reduce costs to consumers, and boost the American economy. President Obama called Drill, Baby, Drill "a slogan, a gimmick, and a bumper sticker ... not a strategy."

Dependent on Middle East oil producers, Americans were paying $4 per gallon at the pump back then, and the Obama Administration refused to open federal lands for additional oil and gas drilling. So private landowners and private companies did what the federal government wouldn't do: they drilled.

Who's laughing now?

The price of a gallon of regular gasoline on Monday was $2.13 nationwide, and below $2 in 18 states.

"Of course [Obama] was wrong. We've seen oil prices fall internationally now by half since last June," said American Enterprise Institute economist Ben Zycher. "The U.S. is now the biggest oil and gas producer in the world, or almost that, and the effect has been to drive prices down as we've seen."

Fox News reporter William LaJeunesse traces liberals' energy evolution ... from scoffing to claiming credit for today's low prices:

Keystone Pipeline Clears 2 Hurdles

The Keystone XL Pipeline, designed to carry crude oil from Canada into the U.S. for refinement, cleared two hurdles today, one legislative and one judicial, reports the Washington Times.

• With the support of 28 Democrats, the U.S. House of Representatives voted 266-153 to approve construction of the project long stalled by the Obama Administration.  The U.S. Senate, now under Republican control, is working a companion bill through its own chamber and is expected to take an early test-vote early next week.

• Hours earlier, the Supreme Court of Nebraska upheld the project's proposed route through Nebraska, overturning a lower court earlier decision invalidating the pipeline's path. In its ruling, the high court determined that the landowners who challenged Keystone's route did not have legal standing to do so.

Thank US Fracking for Low Gas Prices

"Global energy markets have been upended by an unprecedented North American oil boom brought on by hydraulic fracturing," reports Bloomberg.  With crude oil prices collapsing worldwide (at about $70 a barrel today), Russia and the OPEC cartel are the losers, while American consumers and European economies are among the winners.

The winners:

• With average gas price at $2.77 a gallon, every day American consumers are saving $630 million on gasoline compared with what they paid in June prices.
• Every penny the price of jet fuel declines means a savings of $40 million for Delta Airlines.

 The losers:

• Many OPEC members need oil prices to stay at or near $100 a barrel to break even: $161 for Venezuela, $131 for Iran, and $98 for Saudi Arabia, for example.
• Russia's break-even cost is $105 a barrel. With 50 percent of its revenue from oil and gas, it can no longer relay on the same revenue to rescue its economy already suffering from European and US sanctions.

Meanwhile, "[t]he International Energy Agency estimates most drilling in the [US] Bakken formation — the shale producers that OPEC seeks to drive out of business — return cash at $42 a barrel," reports Bloomberg. According to one expert cited, US shale oil producers may break even at $40 a barrel or less.

Sources:
Oil at $40 Possible as Market Redraws Politics From Caracas to Tehran, Gregory Viscusi, Tara Patel and Simon Kennedy, Bloomberg
Saudis Risk Playing With Fire in Shale-Price Showdown as Crude Crashes, Ambrose Evans-Pritchard, U.K. Daily Telegraph
As Oil Prices Plunge, Wide-Ranging Effects for Consumers and the Global Economy, Steven Mufson, Washington Post

Reason for Optimism

He has "a little over 1200 days left in office," a scandal-ridden Barack Obama recently reminded an audience. To which one New York newspaper editorial writer responded, "I imagine that he is not the only person counting down the remaining days of his presidency. ... Given his high recent disapproval polling numbers, I doubt that President Obama will have trouble finding people willing to help him pack his bags as he prepares to vacate the White House."

Given, too, his grossly heavy hand on the free-market economy, no doubt every business sector (and every job seeker) is anxious for that new day.

One business sector isn't waiting, though. As this graphic by AEI's CarpeDiem blog shows, U.S. crude oil production has soared in the last couple of years to 1990 levels.

Bottom Line: A two million bpd [barrels per day] increase in US oil output in only 24 months, almost exclusively from the dramatic increases in shale oil production made possible by revolutionary drilling technologies, is an important energy milestone and has to be one of the most remarkable success stories in the history of US energy production.

Welcome to America’s shale energy revolution, which continues to be one of the strongest reasons to be optimistic about the US economy.

If the energy sector can accomplish this feat despite Obama, just imagine what all other business sectors can do after he leaves office and his anti-free market policies end.

Debunking the US-in-permanent-decline Conventional Wisdom

"We are witnessing a seismic shift in global affairs," writes Victor Davis Hanson, and none of the conventional US-is-in-permanent-decline wisdom "now seems very wise." Consider the "political, demographic and technological change that will soon make the world as we have known it for the last 30 years almost unrecognizable:"

• The European Union, until recently thought to be an emerging powerhouse, is unraveling.
• The Arab Middle East for the last 40 years seemed to be the world's cockpit, as its huge petroleum reserves brought in trillions of dollars from an oil-depleted West. Now the Arab Middle East is in free fall.
• Tiny oil-poor Israel, thanks to vast new offshore finds, has been reinvented as a potential energy giant in the Middle East. Such petrodollars will change Israel as they did the Persian Gulf countries, but with one major difference. Unlike Dubai or Kuwait, Israel is democratic, economically diverse, socially stable, and technologically sophisticated, suggesting the sudden windfall will not warp Israel in the manner it has traditional Arab autocracies, but will instead become a force multiplier of an already dynamic society.
• China is not only resource-poor but politically impoverished. For decades we were told that Chinese totalitarianism, mixed with laissez-faire capitalism, led to sparkling airports and bullet trains, while a litigious and indulgent America settled for a run-down LAX and creaking Amtrak relics. But the truth is that the Los Angeles airport will probably look modern sooner than the Chinese will hold open elections amid a transparent society -- given that free markets did not make China democratic.
• Horizontal drilling and fracking have made oil shale and tar sands rich sources of oil and natural gas, so much so that the United States may prove to possess the largest store of fossil-fuel reserves in the world — in theory, with enough gas, oil, and coal, we will soon never need any imported Middle Eastern energy again. “Peak oil” is suddenly an anachronism. Widespread American use of cheap natural gas will do more to clean the planet than thousands of Solyndras. 

If the United States utilizes its resources, then its present pathologies — massive budget and trade deficits, mounting debt, strategic vulnerability — will start to subside. 
These new breakthroughs in petroleum engineering are largely American phenomena, reminding us that there is still something exceptional in the American experience that periodically offers the world cutting-edge technologies and protocols — such as those pioneered by Amazon, Apple, Google, Microsoft, Starbucks, and Walmart.

Trillions in Economic Growth, Prosperity

We hear "trillions," and we think national debt these days. Now a new report uses "trillions" to describe our potential for new economic growth and prosperity.

The energy world has been turned upside-down—but not in the way that many expected. ... The United States, Canada, and Mexico are awash in hydrocarbon resources: oil, natural gas, and coal. The total North American hydrocarbon resource base is more than four times greater than all the resources extant in the Middle East. And the United States alone is now the fastest-growing producer of oil and natural gas in the world.

Dumb Ethanol Law Costs Us Plenty

Each year 1/3 of the U.S. corn crop grown on 33 million acres of farm land is diverted from food to ethanol fuel, and it's caused corn prices to triple since 2005, when the ethanol law took effect. Congress made things worse with the 2007 Renewable Fuel Standard (RFS) law. Since then, a 2010 Rice University study that found "no reason to believe" that corn ethanol production and use emit less carbon dioxide than gasoline.

Now there may be a better method to produce ethanol fuel cheaper, faster, and without using corn, reports Christopher Helman at Forbes, but the 2007 RFS law blocks its development in the U.S. because the innovation isn't plant-based. So the Dallas-based chemicals company, Celanese, is taking its innovation to China, where Beijing "issued final permits in March ... for an 80-million-gallon plant."

The corn-dominated ethanol lobby is conflicted about making ethanol out of fossil fuels. On one hand, corn growers don’t want competition from cheap gas. On the other, it’s in the national interest to cut oil imports. “We’re supportive of expanding all renewables and all alternative fuels,” says Matt Hartwig, spokesman for the Renewable Fuels Association. Says Joe Cannon, president of the Fuel Freedom Foundation: “We need every option. There are 2 billion people moving from bicycles to mopeds to cars, and that’s just in India and China.”

Thirteen congressmen led by Pete Olson, whose district around Houston, Tex. encompasses dozens of chemical plants, including Celanese, have introduced a bill to add natgas-derived fuels to the RFS. Any change would face attack from the greens but is supported by animal farmers who want cheaper feed corn. “We would prefer not to have the RFS at all,” says a spokeswoman for Olson, “but this is a step in the right direction.”

Until the RFS law changes, U.S. corn farmers will continue to get ethanol tax subsidies, China will get the benefit of a new US-developed fuel innovation, and US consumers will continue to pay higher prices at the gas pump and the grocery store.

Full article: How a Dumb Law Blocks a Great Way to Fuel America, by Christopher Helman 

Winning Minds to Conservatism

Paul Rahe at ricochet.com says Barack Obama has given conservatives "a perfect recipe for a conservative resurgence." Pivoting off a reader's dispirited comment, Rahe argues Obama is forcing Americans to rethink their relationship with their government:

Consider what Barack Obama has done. He has unmasked the tyrannical potential of the administrative entitlements state, and he has once again demonstrated the defects inherent in Keynesian economics. He promised us that the stimulus would bring unemployment down dramatically. He acknowledged that if it did not do so he would be unelectable. He attacked religious liberty, attempting through a court case to interfere with a Lutheran church's ability to choose its own religious teachers as it saw fit, and threatening to make Roman Catholics, the Roman Catholic Church, and Christians and Jews who regard abortion as murder complicit with that act by forcing them to pay for abortifacients. He jammed through Congress a bill designed to undermine the health insurance industry and to institute healthcare rationing. He brought our government to the edge of fiscal insolvency. At a time of rising energy costs, he blocked the building of a pipeline that would bring petroleum from our northern neighbor and friend Canada to the United States and reduce our dependence on the Middle East.

In short, Barack Obama is forcing the American people to rethink the relationship that connects them with their government. Where many of them once saw a helping hand, they now see a threat to their livelihood, their personal and religious liberty, and their well-being more generally. 

Moreover, it is "demonstrably false," Rahe asserts, to argue (as Reader does) that the country is less conservative than it was in 1980 when Reagan won a landslide. Massive conservative national and state wins in the 2010 midterm elections dispel this argument.

...you underestimate our compatriots. They know that our culture is in severe decline, that the family is disintegrating, that our schools indoctrinate our children with secular theology -- and they know whom to blame. All that it would take to turn the present discontents into a realignment would be for a forthright woman or man able to point out the connection linking cultural decline, family disintegration, and political correctness in the schools -- not to mention massive unemployment and fiscal insolvency -- with the administrative entitlements state and the doctrine that it is the responsibility of the government and not the individual citizen to make provision for his well-being. People rally to strength and confidence, not to weakness and timidity. 

Rahe challenges Reader (and conservatives generally) not to "go wobbly" but to "take the bull by the horns:"

One must indict those intent on creating “a new despotism” in which “a small group" is concentrating "into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives.”

A good little spine-stiffening read.

Keystone Pipeline: Losing Friends, Gaining Enemies

In a scathing video commentary at Canada Sun News on the rejection of the Keystone Pipeline, Ezra Lavant lambasts environmentalists and the American president for choosing America's enemies over her northern friends. It's a matter of pride for Canadians. View the full 12 minute video.

New US Oil, Gas Drilling = 1 Million New Jobs, $800 Billion New Revenue

A new study released this month is sure to fuel the debate over US domestic energy policy. The graphic-rich report shows the extent to which current US energy policies are cheating Americans of domestic oil and natural gas resources, as well as the jobs and government revenues that come with them. Key results of the study are:

Rays of Optimism

A favorite saying - "this, too, shall pass" - has been used in our family to temper inflated egos and console bitter disappointments. Lately, it's been an encouraging reminder to conservatives that even the darkest nights are eventually broken by the dawn.

This recession has been one of spirit as much as economics for conservatives. In an extraordinary twist of circumstances, the Fall 2007 economic collapse ushered in an unprecedented foray into liberal-progressive radicalism. It would have been easy to become fatalistic and disheartened, yet Americans didn't. Tea parties were the first rays of daylight, and they reminded us of what America has been and could still be:  That we will be our own masters as long as we choose to be.