Opinion: Saudis declare war on U.S. economy with oil | PostIndependent.com

Opinion: Saudis declare war on U.S. economy with oil

Ken Johnson
Free Press Opinion Columnist

Our great friends in the desert, those good hearted folks in Saudi Arabia, have declared war on America’s economy. Again … with their oil. Is anyone a bit bothered by this?

The price of oil, thanks to America’s “gusher” (and the slowdown in the world’s economies), has fallen from over $100 a barrel to less than $60, a price not seen in years. Gasoline has slipped to less than $2 a gallon. Oil is becoming so cheap, big producers like Russia and Venezuela are headed toward recession and maybe bankruptcy.

Given that the Saudis have upped their production and cut their price to America, while selling for more money to other countries, it’s obvious they are trying for a replay of 1982. Do you remember back then when they cut their price from $40/$50 to less than $25 a barrel?

Our politicians sucked on the idea that we could deal with these fair-minded friends? Exxon’s oil shale project was about to go commercial, but Exxon pulled out and abandoned its $3 billion in the Colony project.

It was May 2, 1982, and if oil for shale had gone on the market, the Saudis and other OPEC nations would have seen their prices fall.

The decision to kill Colony was easy — to be profitable oil shale needed $40 oil. The Arabs were fine at $25 or even less.

Anyone around Grand Junction then felt the result: Bankruptcies, foreclosures, another bust from a boom, and America abandoned the idea of becoming “energy independent.” Oil shale just went away as a viable energy source.

Of course, back then we were buying five or six million barrels a day from Arabia and the OPEC cartel, so before long the price started rising again.

Then came our 2008 “recession” and oil prices fell to about $35 a barrel.

Amazingly, with every environmentalist and most politicians against it, somehow the horizontal drilling and fracking technologies managed to develop huge reserves of oil and saved us many billions of dollars we had been paying the Arabs for their oil.

Like all commodities, oil will cost what it costs. And the stock market will do just fine. Exxon and Chevron aren’t going out of business.

Plus we’ll still keep working our way toward a day, sometime about 30 or so year from now, when we don’t use very much fossil fuel at all.

America seems to run on huge “newsworthy” incidents, such as parading in the streets for “justice” these days. Most of this is whipped up by incomplete and many times inaccurate reporting and then letting social media carry the message.

My very bright middle son has a rule for this nonsense: “If you see it on the Internet, it’s false.”

Until it’s proven true.

Evidently no political leader can connect these dots.

Right now, the world is awash in oil, too much to even process, and more drilling is going on.

For once, it feels good for America; we’re going to be totally free from having to buy oil from the Middle East, from Nigeria, or from Brazil or Venezuela before the end of 2015.

My attitude is simple: Keep drilling, keep fracking, and become truly “Energy Independent.” Look toward the day we are able to sell a lot of oil to the global market, including China.

Then we can tell all our wonderful friends in the desert kingdoms, South America, and elsewhere we’ll be happy to supply them when their own fields run dry.

We could even play a trump card then: We’ll sell only if you take concrete steps to reduce climate-harming emissions of all kinds, and join us in reversing climate change.

Free Press columnist Ken Johnson is founder of the Grand Junction Free Press and former owner/publisher of The Daily Sentinel. He spends his time between the Grand Valley and California.

Support Local Journalism

Support Local Journalism

Readers around Glenwood Springs and Garfield County make the Post Independent’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User