August 23, 2018 – Africa Oil & Power
The NOPEC Non-Event
By Michael D. Ehrenstein, Ehrenstein|Sager
NOPEC Is Not Based On Good Policy
Verifiable facts breed good policy. Here, the facts demonstrate that the United States’ petroleum production capacity is sufficiently robust to temper global decreases in production or increases in price. As explained by Russell Braziel, CEO of RBN Energy, in his testimony about NOPEC before the House Judiciary Committee (2018 WL 3547038), the shale revolution doubled U.S. crude oil production from 5.5 million barrels per day in 2010 to 11.0 million barrels per day, as of July 13, 2018. The facts indicate that some OPEC regulation of production occurred because of U.S. over-supply and entrance into the global market as a net exporter. According to Mr. Braziel, the U.S. now exports about 1.8M barrels per day (and about 4.5M barrels per day including finished products), driving other countries to cut production to make room for U.S. exports. By cutting production, these countries effectively ceded market share to U.S. producers. Mr. Braziel’s analysis reflected an almost perfect parity between the increase in U.S. exports and the decrease in OPEC production. With such stout production capacity, the U.S. is positioned to adequately respond to cartel price manipulation if necessary.
Furthermore, the notion that sovereign states entitled and intent to act in their own best interests operate in anything remotely resembling a free market requiring anti-monopoly protection is an economic hallucination which ignores the reality that as between governments, economics and diplomacy are inherently interconnected. Economics and diplomacy are a more effective means to conduct foreign policy than the slow, dull tool of litigation. The U.S. enjoys overwhelming economic power— providing the United States ample diplomatic tools to protect its interest in low cost petroleum products for its citizens. NOPEC ignores existing and highly effective diplomatic tools, in favor of the political showmanship attendant to an election.
Read the full article here: https://africaoilandpower.com/2018/08/23/the-nopec-non-event/
