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Like a toy that fascinates beyond any reward, the oil producers
in North Dakota
have a new bauble. From the earlier days of only a few years back they have
already advanced the recovery technology to substantial production increases
from existing sites. Some heavily drilled areas such as the Fort Berthold Reservation,
produce more than a third of the overall
million barrel per day yield from the enormous Bakken field. The oil shale resources that have been
developed by the controversial practice of hydraulic fracturing have changed
the face of the oil industry. Oil
producer nations are now a global force in full retreat, and no longer able to
dictate prices by advancing a convenient theory of impending scarcity, or
scaling back production.
US Production Has Changed the Global Market
The world is awash in oil and oil reserves, while the Earth
may not continuously produce fossil fuels, the ingenuity of mankind has made it
appear to be an onion rather than a vessel. Technology turns new leaves and the
half full glass is once again overflowing. Nations and businesses that invested
in $95 per barrel oil only six months ago, now realize the price may fall below
$50. In the United States,
automobile owners see things they had forgotten existed, such as the number “$1”
on front of the price per gallon at the pump. I imagine few of them say thank you Mr. Obama,
but the policies of his Administration – low-interest rates, steady job growth,
and liberal leave to advance an environmentally risky technology, have paid
enormous dividends for consumers around the globe. The U.S has set records for
annual crude production.
Russia,
Iran, and Venezuela
Suffer
Russia planned of $95 per barrel
oil and free access to western bank financing. After the Obama sanctions and
the impact of Obama banking and growth policies in the US, oil has
fallen to near $50, the Ruble has collapsed, and the Russian economy is in a
deep recession. Buoyed by controlled news and media, the Russian government
remains popular and has slowed but not stopped the Invasion in Ukraine. The
people do not know the sacrifices they make are not for the nation but likely
to benefit a luxury class of millionaires. Venezuela
and Iran
have also fallen economically in lockstep with the fall of oil. Venezuela experiences
critical domestic shortages, inflation, and negative growth. Iran, already faced with sanctions, now must wrestle
with threats from ISIS as well as severe
shortfall in revenues from oil. With limited access to international sources of
financing, the government faces tight budgets and monetary constraints.
The overall impact is that the U.S. economy has gained steam, and
with a short burst of discretionary consumer spending, the recovery has shown
remarkable depth. There may yet be an unwanted corollary to repair the damage
to the environment generally and to the water supply in particular as a result
of wide spread recovery of shale oil deposits.
