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

'Help me stay rich, Colorado'

"A grass roots group is running some terrific pro-fracking ads in Colorado," writes John Hinderaker. "They feature a Middle Eastern sheik and a Russian oligarch pleading with Coloradans to help them stay rich by suppressing the production of American energy. They are funny and true, and therefore highly effective."

Below the Sheik and the Oligarch:

Want Jobs? Frack

"Fracking in the state of Colorado during the year 2012 created 111,000 jobs, whereas Barack Obama's entire economy has only generated 110,000 jobs for Millennials since 2007," writes Katie Kieffer @ townhall.com.

Last week, TIME Magazine reported: “Fracking generated $29.5 billion in economic activity in Colorado in 2012, creating 111,000 direct jobs with an average wage of $74,811, according to the Colorado Petroleum Association.” One month earlier, TIME reported: “Since 2007, there’s been a net increase of only 110,000 jobs held by workers between the ages of 22 and 34, making millennial unemployment nearly flat for the past six years.”

In June, 15.2 percent of Millennials were unemployed according to Generation Opportunity. Over a third of Millennials were “homeless” during the Obama years—living at home with their parents or grandparents against their will. Finally, Millennials are struggling under the weight of historic levels of student loan debt and rising healthcare insurance premiums at a time when good jobs are scarce.

We can recover this economy, but it will take individuals demanding free market solutions. Let’s audit the Federal Reserve. Let’s lower the corporate income tax rate to the lowest, not the highest, in the world. Let’s each opt out of Obamacare as I explain how to do in my new book titled, “Let Me Be Clear.” And, above all, lets frack.

Fracking Helps Poor More than Government Program

"No one is doing more to increase income inequality in America than the affluent environmentalists who oppose natural gas drilling" [i.e., fracking]. — Fracking and the Poor, Wall Street Journal

Fracking has so dramatically lowered the price of natural gas that it "shaved about $10 billion a year from the utility bills of poor families."

To put it another way, fracking is a much more effective antipoverty program than is Liheap [federal Low-Income Home Energy Assistance Program]. In 2012, Liheap provided roughly $3.5 billion to about nine million low-income households to subsidize their home-heating costs. New drilling technologies saved poor households almost three times more. Low gas prices benefit nearly all poor households, while Liheap helps fewer than one in four.

You'd think that good liberal egalitarians would welcome these financial savings to poor households. Yet most green groups, in particular the Sierra Club, continue to oppose fracking and are using lawsuits and political lobbying to stop it. Rich Hollywood types like Matt Damon propagandize against it. No one is doing more to increase income inequality in America than the affluent environmentalists who oppose natural gas drilling.

"FrackNation" Premiers Tonight

"FrackNation: a journalist's search for the Fracking Truth," a documentary directed by Phelim McAleer, Ann McElhinney and Magdalena Sagieda, will premier Tuesday, January 22 at 9 pm Eastern on AXS TV channel (check website to see if it's available on your cable provider). For more information, visit the Fracknation website.

Here's a preview:

Shouldn't Matt Damon be a Little Embarrassed?

There's a little surprise behind Matt Damon's latest flick, "Promised Land." No, the surprise isn't that the movie, according to Phelim McAleer, "attacks fracking—a new way to get oil and gas out of the ground, which has become the latest villain of the environmental movement." It's that the film "is being financed by New Image Abu Dahbi—a company fully owned by the government of the United Ara Emirates."

The UAE is a small Arab kingdom with a spotty record on freedom-of-speech issues and whose economy is completely dependent on selling oil and gas. The UAE stands to lose trillions of dollars if fracking leads to increasing energy independent for the United States and Europe, as many analysts predict.

Media outlets don't seem bothered by this revelation, certainly not to the extent they were bothered by another recent movie release.

“Won’t Back Down,” a film just released at the weekend, casts a cold eye on the union-dominated public-school system. Starring Oscar winner Viola Davis and Maggie Gyllenhaal, it is an emotional, heartwarming tale of parents succeeding against the odds.

But many reviewers have focused on attacking the funding for the film.

The NPR reviewer called it a “propaganda piece . . . from a conservative mogul.” Slate.com’s critic called it an “agenda-driven piece of crap . . . financed by conservative Christian billionaire Phil Anschutz.”

Strange, next to the utter lack of curiosity about funding for “Promised Land.”

Until the media start applying consistent standards and asking difficult questions about that film’s funding, we’ll never know if Matt Damon has gone from producing works of art to a new, more sinister type of film — a very different “movie on demand."

Incidentally, McAleer, a documentary film producer is currently working on "FrackNation," a new documentary telling the truth about fracking. Watch for it.

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.