This Isn't Your Father's OPEC

Now that the faux debt limit debacle appears to have been resolved (for the moment), we can focus on other things of greater import.

It was 40 years ago that the Arab Oil Embargo took place, and none of the dire predictions made about where we were headed in regards to energy, and specifically fossil fuel, have come to pass. Instead the US has become an energy giant with more proven reserves than the rest of the world combined. While not all of it is accessible at the moment due to the Obama Administration's ban on drilling on federal lands and offshore, those wells on private lands have been producing vast amounts of new oil and natural gas. And we've barely scratched the surface on all of the recoverable oil and gas still waiting to be tapped.

Many of the energy problems we suffer from today does not come from lack of supply but from government interference (and incompetence). We've seen that again and again. Even the gas shortages during the embargo in 1973 and again in 1979 were due to the government 'monkeying around' with fuel allocations, prices, or both.

In 1979 the gas lines returned, at least on the East and West Coasts, while the Midwest was drowning in gasoline. This was all due to the government allocating fuel rather than letting the market decide where fuel needed to go. (If I recall correctly the WP Dad was doing a job in the Midwest at that time and there were gas wars going on because there was so much gas and diesel they didn't know what to do with it all. The rest if us had to deal with gas rationing because there wasn't fuel to be had at any price.)

Back then OPEC, the Organization of Petroleum Exporting Countries, was calling the shots, setting production quotas and oil prices. But over the years OPEC's influence on both supply and prices has dwindled. This is particularly so today as new drilling and extraction technologies have made oil and natural gas plentiful in a number of places around the globe. That's certainly true here in the US and Canada (and I expect Mexico won't be far behind).

What's ironic is that the supply of oil and gas is expanding in the US even though the demand for it has flattened or even fallen. In fact US oil consumption is only 7% higher than it was back in the early 1970's. We've learned to do more with less energy and it shows.

What the new domestic sources do for us is help insulate us more from disruptions in oil supplies from hostile nations or by the actions of other nations that have the same effect.

Now only if we could get nuclear power back on track.