Proving a Negative

Proving a negative -- proving that the absence of something is definitively due to very specific reasons or circumstances -- is an inexact science at best. There is a hugely significant “negative” that  has occurred recently, one that is quite plausibly due to some very distinct actions and clear-cut decisions made by the American oil industry and the Trump administration: the non-event that has happened is world crude oil prices not rising in spite of the cruise missile and drone attack on the Saudi oil fields on September 14th, 2019 that destroyed a significant portion of Saudi oil production, the missile attack on an Iranian oil tanker in waters off Saudi Arabia on October 11th, 2019 and new Mideast unrest in the form of Turkey’s military incursion into Syria in mid-October. In years past, any one of these incidents would have spooked the world’s oil market into n hysterical price spike; today, the cumulative effect of all of them is not even a murmur on the radarscope. U.S. retail gasoline pricing has not really gone up at all in the face of these episodes.

Why? What is different now?

Remember a few years ago during the Obama administration when oil/gas pricing was high? The popular line among the Democrats -- obsessed as they were about not offending their Green voting bloc -- was, “We can’t drill our way out of this [high oil pricing].”

Just like subsequent events in other areas have proven them wrong about so many things (“The stock market will tank if Trump is elected!”), the Democrats were wrong about this too. Dead wrong. As fracking and other drilling/extraction technologies (such as horizontal drilling and the capability to rejuvenate old wells previously thought to be “unproductive”) have improved, the oil output of the United States has increased to its highest level in 50 years. In fact, U.S oil production is more than double what it was as recently as just ten years ago, before the fracking revolution. Depending on the particular study one is looking at, the U.S. ranks anywhere from 3rd to 1st in highest oil output in the world. We produce so much oil that we’ve actually become a net exporter of oil for the first time since the 1940s. So quite simply, we did “drill our way out of this.”

The Democrats’ affection for the ill-conceived, fantastical Green New Deal is an example of unintellectual wishful thinking pushing aside factual reality.  So-called “sustainable, renewable” fuels are simply not economically viable in today’s energy market without heavy government subsidies. It’s just too expensive. For example, electric cars still only represent a 2% share of the U.S. auto market, despite all the frenzied attention, government subsidies and publicity they’ve received. Battery technology remains too expensive and too short-lived for electric vehicles to be affordable for the mass market and for drivers to have a reliable, confidence-inspiring range of over 400 miles. A comprehensive, country-wide recharging infrastructure still doesn’t exist, so regardless of their range or the affordability of the purchase price, without the assurance of being able to “refuel” anywhere away from home, electric cars are sentenced to only really being suitable for around-town/recharge-at-home use.

However, at some point in the future, alternative, non-carbon-based fuels will indeed become the norm. The R&D needed to produce them is taking place now (driven by the promise of nearly unlimited free-market profits), and there can’t really be any doubt that those alternative energy sources will someday become a reality, whether in 25, 50 or 75 years or so. That timeframe -- although it seems significant by human social/lifespan standards -- is a mere blink of an eye in geological terms of the planet and it’s well before any risible anthropogenic ‘climate change’ becomes permanent. So yes, in the long term, alternative fuels will “save the day” and prevent any imaginary man-caused warming from permanently harming the planet.

But those fuels are not here now. So in the short term, we need oil. And we’ve got it, and that makes us independent of having to depend on other countries for our oil. The popular phrase in the recent past of proponents of the U.S. oil industry was, “Drill, baby, drill!” We did and we’ve got it. That is why those recent terrorist events perpetrated against the oil market had virtually no effect on world oil pricing. In years past, those attacks would have sent shockwaves of panic throughout the world’s energy sector. Crude oil prices would have easily risen 25–50%. Not so today.

Remember the four main factors that affect U.S oil and gasoline pricing:

  1. Worldwide crude oil supply and demand.
  2. Oil exploration activity/extraction technology -- First, you have to look for it. A willingness to explore sends a message to the market that greater supply is coming. Then once you find it, you have to have the technology to maximize the extraction and production.
  3. Refining/distribution considerations -- You have to have the refining capacity to make use of the crude oil supply. Refineries are subject to seasonal switchovers for different kinds of gasoline, maintenance interruptions, accidents, etc. Tight refining capacity is often a determinant of regional gasoline pricing, regardless of the amount of crude oil supply earlier in the chain.
  4. Geopolitical influences, also known as the “Terror Premium.”

The current administration’s willingness to explore (such as opening up ANWR) and the rapidly-evolving technology of fracking, horizontal drilling, and other modern extraction-related practices have markedly influenced factors no. 1 and 2 in our favor. For the first time ever, our oil supply and production is so strong that it gives us a considerable cushion from no. 4.

Proving the negative -- that the recent non-rise in oil/gasoline prices from terrorist activity and renewed Mideast unrest was due to increased U.S. oil exploration and production -- remains a difficult proposition for the narrow-minded to accept. But for thinking people who can grasp abstract cause-and-effect relationships, the correlation between increased U.S. oil production and continued world oil pricing stability is overwhelmingly positive.

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