by Robert Maynard
There are a lot of factors that should be driving our economy into further recession. Many forecasters have been predicting such a course, citing excessive regulations, run away spending and printing more money than economic productivity warrants. Yet, despite these factors, the economy remains afloat, if barely. Some have pointed to the shale gas revolution as the reason and this National Review article dwells on the irony of the Obama Administration benefitting from a technological breakthrough that they so adamantly opposed:
No president in modern American history has bashed the oil and gas industry more than Barack Obama. And none has benefited from that industry more.
Proving that last sentence is easy. It requires only that we imagine what world oil prices — and the U.S. economy — would look like in the absence of the shale gale, the multi-state surge in domestic oil and gas production of the past few years, as drillers have figured out how to produce vast quantities of methane and liquids from shale deposits.
Let’s start with oil prices. The possibility of a wider conflict in Syria has led to a surge in oil prices. They’re up by about $7 per barrel since the August 21 chemical-weapons attack in Syria. Attacks on pipeline infrastructure in Nigeria and Iraq, along with the ongoing conflict in Libya and the continuing shortfalls in Iranian production, have added further uncertainty. In August, according to the Energy Information Administration, the volume of unplanned supply disruptions in the global oil market totaled 2.7 million barrels per day.
Luckily for Obama, U.S. oil production is soaring. Last year, it rose by about 800,000 barrels per day, the biggest annual increase since 1859. And it is expected to rise by more than 800,000 barrels per day this year, which would set another record.