By Dr. Merrill Matthews Institute for Policy Innovation.
The left and the mainstream media are on a years-long quest to prove some type of collusion between President Donald Trump and Russian President Vladimir Putin. We have no inside knowledge on that front but what is apparent is that Trumps energy policies are helping to defund Russia and its global mischief-making.
Begin with the fact that oil and natural gas provide about 40 percent of Russian government revenue according to the U.S. Energy Information Administration. When oil and gas prices are high Putin has more money to go rogue.
Now crude oil and natural gas are commodities and are very susceptible to wide price swings common to most commodities. When markets around the world think major economies are growing and will need more oil and gas which was the case last spring prices rise.
When markets fear an economic slowdown or warmer-than-normal winter which could lead to an oil and gas glut energy prices tend to fall as we saw towards the end of last year.
However the Trump administrations pro-energy policiesfrom exploring to drilling to pumping to transporting to refining to exportinghave worked to increase the supplies of oil and gas putting long-term downward pressure on prices.
While Barack Obama recently tried to take credit for the oil and gas production explosion his administration road-blocked and slow-walked exporting as well as efforts to expand drillingespecially on federal land and offshore. (FactCheck.org calls his claim misleading" which we consider generous.)
In other words energy production expanded in spite of Obamas policies not because of them.
Trump is working to remove those barriers which has led to significantly more drilling. Last October U.S. energy companies produced 11.5 million barrels of crude oil per day a 19 percent increase over October 2017 according to the EIA.
Natural gas production increased by 12 percent over the same time period.
Whats important to understand is the increased supply puts downward pressure on prices. While supply isnt the only factor its a big one.
Yes last fall Trump called on Saudi Arabia to reduce its crude oil output in order to get prices up. But that effort was intended to help U.S. producers not Russia keep the U.S. supply growing.
Had Hillary Clinton been elected president she promised to double-down on Obamas anti-fossil fuel policies which would have decreased global supply and likely increased oil and gas prices.
Trumps policies have put Putin on a budget; Clintons would have handed him a blank check.
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Todays PolicyByte was written by Dr. Merrill Matthews resident scholar with the Institute for Policy Innovation.
