According to a recent report by Bank of America, the United States has surpassed Saudi Arabia as the world’s biggest producer of oil:
“The U.S. increase in supply is a very meaningful chunk of oil,” Francisco Blanch, the bank’s head of commodities research, said by phone from New York. “The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.”
Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking. The surge in supply combined with restrictions on exporting crude is curbing the price of West Texas Intermediate, America’s oil benchmark. The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm.
Ask yourself how this is possible. The US is the world’s biggest oil producer, and yet gasoline prices here in the states are higher than they’ve ever been. Which means that oil consumption in the US is so prodigious that it’s outstripping record-high oil production both here and in the world.
There’s really only one solution to this—we need to cut back on our consumption. Especially for private consumers, developing “green” technologies for the local production of electricity and concurrently developing a good electric car would go a long way to reducing our oil consumption, since the majority of our oil consumption goes toward transportation.
Also, I think it is important to recognize that fuel prices are being allowed to rise for political reasons. I think that it is likely that fuel prices absorb inflation much more than other prices do, and that this is one way the civil government pressures consumers into thinking that government-subsidized crony greenism would be good for the country. Most people believe that fuel prices are high because of discontinuities in Middle Eastern oil supply. But the majority of our oil imports come from Canada, which wouldn’t be very much impacted by a war in the Middle East. Most food products are subsidized by the federal government, thus reducing prices for the consumer. Without those subsidies, it is likely that there would be an even greater public outcry concerning the rising cost of living. Ultimately, prices are not being allowed to reflect the true state of the market, and consequently, we are being manipulated by a politically-motivated conglomerate of power brokers.
In the end, de-regulation and the destruction of crony capitalism would do wonders for this situation. I don’t think that will happen anytime soon, but eventually the system will collapse under its own weight. It’s just a matter of time. Either we make decisions about our future now, or those decisions will be made for us while we’re unprepared.