There’s an easy way for America to prevent another shock in world markets: Produce more oil.
By Mohammed Alyahya, Wall Street Journal, Oct. 13, 2022
The Biden administration plans to “re-evaluate” America’s eight-decade-old alliance with Saudi Arabia because of the OPEC+ decision to cut oil production. But the White House posturing looks like a bid to distract from the effects at home of Washington’s failure to pursue a successful transition to clean energy.
Blaming Saudi Arabia, or OPEC+, or Vladimir Putin, for an energy crisis that results from a policy of switching from carbon fuels to “clean energy”—on the basis of what look like utopian assumptions—is disingenuous. Unlike countries such as Japan or China, America can produce far more oil than it consumes. The oil prices U.S. consumers pay are due to choices their leaders made.
In September 2019, the U.S. became a net exporter of crude oil and petroleum products for the first time since such records have been kept. In 2020 America exported still more oil, with investment in domestic pipelines, refineries and extraction technologies and resulting employment all reaching new highs. But in 2021 America began importing much larger amounts of crude oil than it produced. In 2022 the U.S. will again be a net oil importer. In less than two years, investment in the domestic American oil industry has collapsed, U.S. refining capacity has atrophied, and the jobs that investment produced have largely vanished.
The causes of this reversal, which left the U.S. dependent on imported oil at a dangerous geopolitical moment, aren’t a mystery. In the 2020 election, American politicians, from Joe Biden down, ran and won on a set of policies intended to wean the American economy off fossil fuels in favor of so-called clean energy. These policies included bans on fracking, bans on drilling, closing down the Keystone Pipeline and other infrastructure built to serve future energy needs, and subsidizing alternative energy, such as solar, and electric cars.
Last week some Washington commentators spouted accusations of Saudi Arabia “siding with Russia” after the OPEC+ announcement of relatively small production cuts. In a statement Thursday, the Saudi foreign minister revealed that the U.S. asked OPEC+ to delay announcing its production cut by a month and said that he rejects such “dictates” from Washington.
If America wants to prevent another shock in world energy markets, it should begin producing more oil.
Mr. Alyahya is a fellow at the Harvard Belfer Center’s Middle East Initiative and a senior fellow at the Hudson Institute. This article has been abridged. For the article in full, click here.