America Must Manage Global Oil Prices!

America is the World’s largest oil consumer. America is the World’s largest producer of oil and natural gas. America has the World’s largest reserves of fossil fuels. Based on these three facts, there is no excuse for the World’s economies to be required to endure unstable and excessively high energy costs. The economic stability, and most likely the security, of the World will improve dramatically if America regulates global energy prices rather than an unpredictable and unstable group of oil producers. In other words, it is in the best interest of other energy consuming economies for America to achieve energy security and independence.

At the end of 2014, Saudi Arabia clearly demonstrated, America’s economy as well as the World’s economies are easily manipulated by whatever country controls the price of oil. Right now, Saudi Arabia is undermining America’s efforts to become less dependent on foreign oil. Rest assured when Saudi Arabia decides to reduce production, oil prices will rapidly increase which likely do significant damage to America’s economy. America cannot allow Saudi Arabia to successfully subvert America’s push for energy independence.

How can America end Saudi Arabia’s control over America’s and the World’s economies? First middle class American’s have to accept the fact that without oil, modern society cannot continue. America must do whatever is necessary to accelerate efforts at becoming energy independent. In 2005, America imported 60% of its petroleum and in 2015, the EIA, (the U.S. Energy Information Agency), projects America’s petroleum imports at 22% of consumption. A dramatic change, especially when Americans realize that not only was this feat accomplished without U.S. Government support, it was achieved in spite of governmental efforts to curtail America’s oil production! Not only did Washington not support the efforts of Americans to gain energy independence, they actually have done whatever possible to hinder current and future energy development efforts. Think what could happen if America’s elected leaders would accept the reality of America’s energy needs plus the fact that America needs to rethink its approach of combating global climate change!

If America is to gain control of its economy, America must control the cost of energy. Since Saudi Arabia is trying to undermine America’s oil production gains by setting the cost of oil at an amount below America’s production costs, what would happen if America adopted a minimum price for a barrel of oil? The minimum price of a barrel of oil should set at a level which encourages America’s oil industry to continue with efforts to produce more and more oil in America. For example, if America set the minimum price of a barrel of oil at $60 and placed a tariff on imported oil that cost less than $60, would America be able to stabilize oil prices?

It is highly unlikely that America will ever produce more oil than it consumes. This does not mean it is impossible for America to produce all the oil it needs but as America gains more control over its energy needs, World economics will change dramatically. At some point it will be in America’s as well as the World’s best interest for America to purchase energy off World markets. That said, America needs to develop the production capacity to produce enough oil and other energy which will allow America to manage energy production in response to fluctuations in World supplies and prices. If World energy production drops, America needs to be able to increase domestic production to a level which accounts for the reduced World energy supply. If World energy supplies increase with World market energy prices below domestic production costs, America needs to reduce domestic production while purchasing energy on World markets. Think of this as a practical approach to meeting America’s energy requirements, not an ideological shift away from free enterprise or capitalism.

The bottom line is America will be able to control America’s as well as the World’s energy prices simply by regulating America’s foreign oil purchases. Since some country or organization will always control World energy markets what country is better prepared to do so than America?