Simmons: OPEC production cuts shine brighter light on importance of American oil and gas
By Brook A. Simmons
The interests of OPEC+ have been, and will continue to be, in conflict with those of the United States. It is time for the current administration to stop pretending OPEC+ is somehow a friendly group.
OPEC+ is a self-interested, price-support cartel that makes decisions based upon the needs of its members, not the needs of U.S. consumers, nor the political interests of any administration. Its constituent kingdoms, dictatorships, and countries may, or may not, be aligned with U.S. interests depending on Realpolitik. Several OPEC+ nations have opposed U.S. interests globally for decades, export terror and have little regard for individual liberty. One – Russia – seems bent on starting a third world war.
The miracle of the U.S. shale revolution and the lifting of the U.S. crude oil export ban altered for the better America’s relationship with OPEC+ in major ways. OPEC+ hates it.
The 24-nation OPEC+ agreed last week to steep production cuts, taking 2% of global oil supply off the market, relative to its August baseline. The production cuts come three months after President Joe Biden traveled to Saudi Arabia in a failed effort to secure commitments on energy production and less than a year after he begged the oil cartel to boost production amid higher gasoline prices.
OPEC+ production cuts shine a brighter light on the importance of America’s oil and natural gas industry. American oil and gas producers can power our nation and assist our allies around the globe, but this requires support from our nation’s leaders. President Biden has never hidden his intention to limit, if not end, U.S. oil and gas production, and the threats of higher and more costly regulatory and tax burdens from the current administration and its Capitol Hill allies still exist, even while the President calls OPEC’s decision shortsighted and continues to beg the energy cartel for more oil.
Oklahoma oil and natural gas producers have no say in the price they are paid for the products they produce. Just like farmers and ranchers, oil and natural gas producers can only take the price the market gives them, and the market moves up and down every day. Political actions that choke off drilling capital, increase taxes, cut exports, increase regulatory costs or prevent oil and gas development make it even more difficult to invest the many billions of private dollars necessary to increase American oil and gas production.
Reduced investment in America’s proven energy infrastructure means consumers are now losing access to the abundant, affordable energy sources that have driven our nation’s economic strength. President Biden can unleash America’s oil and natural gas industry, and we can lessen the stranglehold OPEC+ has on world energy prices, but it will require Democrat leaders to make a U-turn from the anti-energy positions they have taken.
Want more proof our nation has chosen the wrong horse to ride? One of the few nations to applaud the OPEC+ decision was Russia, with Kremlin spokesman Dmitry Peskov calling the production cut “balanced and thoughtful.”
Instead of embracing Kingfisher County roughnecks and Grady County pipeliners, our nation’s leader has chosen to rely on energy-producing countries that have a far different worldview than our own.
— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma