Drill, Baby, Drill

When President Trump declared his energy policy as “drill, baby, drill,” on the campaign trail back in 2015, it was an act of pure genius.Fossil fuel spigots for oil and natural gas were reopened. Mr. Trump always encouraged entrepreneurs as they developed fracking and horizontal drilling to generate even more oil and gas production. America became energy independent and dominant. We no longer had to rely on Middle Eastern oil from Saudi-OPEC, or the oil from enemies like Iran, and Russia, and Venezuela. Those days are gone.Back in 2015, America was producing 9.4 million barrels per day. Today, we are at a record-high level of 13.6 million barrels per day.President Biden and his merry band of existential climate extremists are now way back in the rearview mirror.According to the Committee to Unleash Prosperity Hotline, America is currently producing 24 million barrels per day in oils and liquid fuels, more than Russia and Saudi Arabia combined.Indeed America is producing nearly as much natural gas as Russia, Iran, and Communist China combined at 110 billion cubic feet per day.If Vice President Harris had won in 2024 with her net zero carbon emissions agenda, oil would probably be well above $100 a barrel. And gasoline more than $5 a gallon today.But as it turns out, Operation Epic Fury in Iran has had only a mild impact on oil and gas prices.Writing in the Wall Street Journal, Greg Ip notes that “changed regimes in Iran and Venezuela would neutralize two of the world’s most disruptive oil powers.”China is soon going to lose its cheap oil discounts from Iran (and perhaps Russia), and will be forced to pay full market prices, prices that at the conclusion of Epic Fury will probably drop into the mid fifties.Meanwhile, America is producing so much that we have become a net exporter, which is remarkable.Even during times of stress when prices temporarily bulge, exporting energy companies and their employees will still be quite profitable. And there will be no recessionary oil shock.And because of our tremendous oil and gas production overall, the Iranian war has produced only the smallest bump in pricing. Hence, the inflation threat is de minimis. Just as is the recession threat. And being the world’s dominant energy producer gives Mr. Trump enormous leverage in his foreign policy dealing with all countries, friends and enemies.It gives us leverage on trade reciprocity. Now the Iranians boasted that they would close the Strait of Hormuz, but that was fake-news fearmongering.Even with all that, American energy dominance renders Hormuz much less important and easily fixed with government insurance guarantees, and our great navy.Mr. Trump is changing world history right now by ending Iran’s 47-year war against America. He is also changing the international balance of power.Oil and gas are a big part of all this. Drill, baby, drill.From Mr. Kudlow’s broadcast on Fox Business Network.

Drill, Baby, Drill

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