Global and home-grown adversaries are determined to sink America’s petroleum companies in bankruptcies. Saudis are flooding their world markets with cut-rate competition; the U.N. and environmental lobbies are drowning them in a rising ocean tide of alarmist climate crisis blame; and the EPA is regulating their profitability underwater.
Meanwhile, the Obama administration is soaking taxpayers to feed pet green energy sharks.
Yet despite his reported global warming crisis, President Obama met a cool reception when the royal family didn’t make a big deal of his Air Force One arrival in Saudi Arabia last April. It was nothing like the media fanfare that occurred when King Salaman bin Abdulaziz and other senior leaders greeted heads of neighboring states in advance of a six-member Gulf Cooperation Council meeting.
That snub reportedly had much to do with anger on the part of Riyadh officials over the president’s recent comment that the Saudis and Iranians should “share the neighborhood,” reflecting an administration “pivot” toward the Islamic Republic leading up to last summer’s nuclear summit.
Gulf security expert Mustafa Alani observes that the decision not to send a high-level welcoming delegation to greet Obama was intended as a signal of little faith in his leadership. Alani told the Associated Press, “Here you have deep distrust that the president won’t deliver anything.”
At most, official pictures showed Obama shaking hands with the king’s son and Deputy Crown Prince Mohammed bin Salmon, the architect of policies aimed at strangling U.S. oil and gas competition through below cost economic suffocation. On that score, you might imagine that there was much they might agree upon.
After all, neither are big American petroleum industry enthusiasts.
Don’t expect any cheering from either of them over the fact that much to the dismay of the Saudis, OPEC, Russia, and Iran . . . along with big environmental activist Obama administration donors . . . the U.S. has launched an energy revolution as the world’s leading oil and natural gas producer.
In fact that’s exactly why all of the above are bankrolling anti-fracking propaganda premised upon ginned-up water pollution and overheated climate fright.
As Nathan Vardi reported in a 2015 Forbes article, Saudi Arabia is making a massive $750 billion bet backed by foreign currency reserves that it can endure lower prices longer than other major oil-producing countries both within and outside OPEC, even including American shale.
Yes, but in addition to pumping out under-priced oil, that bet is also extracting a painful deficit. A 2015 budget report issued by the kingdom revealed a $38.6 billion shortfall.
Until recently, Saudi Arabia held the distinction of world’s largest oil producer because shallower deposits there make it much cheaper to extract. Fracking changed that economic equation, and American reserves are at least as plentiful. At least that was the case until the Saudi oil kingdom began to sell at a loss to drive other suppliers out of the global market.
So far that strategy has been working. If the Saudis can keep oil at or below $50 a barrel, we’re going to continue to see a lot of U.S. casualties.
And they’re getting lots of help in this from the White House. Like, for example, through a proposed federal “fee” in the Obama administration’s 2017 budget which will add $10 to the price of every barrel of domestic oil to further subsidize otherwise price-prohibitive, anemic and unreliable wind and solar energy; and to finance pork barrel high-speed rail systems to nowhere.
As Sen. John Barrasso, R-Wyo., a member of Senate Energy and Natural Resources Committee observes. “This is not the time to add costs to American energy production — or to shut it down altogether. Doing so will only help our adversaries and make us and our allies more dependent on them.”
The new tax which will add about 24 cents per gallon to the price of gasoline will be bad for consumers, for businesses, and for local, state, and national economies . . . all not particularly cheerful news following a May Labor Department report showing the weakest national job growth since 2010.
Perhaps not coincidentally, most of the previous job gains over the past seven years occurred in oil-rich states. Texas alone added more than 1.25 million.
Meanwhile, the Saudis are hurting too.
In response to shrunken oil revenues, Deputy Crown Prince bin Salman has announced plans for the kingdom to increase the percentage of government debt to gross domestic product to 30 percent from 7.7 percent now, plus also introduce new value-added taxes and income taxes for expatriate residents.
The influential deputy crown prince reportedly plans to visit Washington, D.C. this week.
While it’s unclear whether he will meet once again meet with President Obama, they would obviously have many common problems and interests to discuss.
And besides, what could possibly go wrong?