Saudi oil will probably face less competition in the future thanks to new EPA rules.
Thanks to the new technology of fracking, there has been new investment in shale oil in the United States. As a result of this increase in natural gas, the price of oil has tumbled. This will slow down new natural gas development because developing such fuel sources only makes economic sense when oil is above a certain price point. But the ability of new investment to develop new sources of natural gas could prevent foreign producers from demanding higher prices.
So now the Obama Administration is making sure that all future development is hampered by yet more regulations. The Daily Caller reports, “Boom To Bust? Obama Targets America’s ‘Fracking’ Revolution.”
The Obama administration unveiled new regulations on Wednesday targeting methane emissions from oil and natural gas operations that the industry says could stymie the U.S. energy boom.
“As oil and natural gas production has risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,” said Jack Gerard, president of the American Petroleum Institute, the nation’s top oil and gas lobby.
“Onerous new regulations could threaten the shale energy revolution, America’s role as a global energy superpower,” Gerard added.
The White House’s plan looks to reduce methane emissions from oil and gas operations 40 to 45 percent by 2025. President Barack Obama has ordered the Environmental Protection Agency to issue new methane rules for new oil and gas operations. Obama also proposed regulating existing oil and gas operations, but only if they reside in countries that fail ozone standards.
When I was listening to a radio report on this, it stressed how these regulations would only apply to new development. That is politically ingenious. Since only new development will be subject to these regulations, no existing natural gas operations will be damaged. The expense will simply deter further investment. No one notices the absence of a new business. There is no obvious damage. It is all hidden. Conceivably, as the prices go up sooner, existing natural gas operations will benefit since they won’t have as many new competitors. The next time we experience a bubble in oil prices, Saudi Arabia, Russia, Venezuela, etc will benefit longer because it will be harder to profitably invest in new developments since they are hampered by the new regulations.
And all of this is completely unnecessary. This is true not only because man-made global warming is an obvious scam, but because you don’t have to regulate an industry to prevent it from regulating the product it sells. Methane in relation to the fracking industry isn’t like stopping methane from cows; because farmers don’t care about harvesting methane.
“EPA’s proposed methane regulation is redundant, costly, and unnecessary,” said Thomas Pyle, president of the free-market Institute for Energy Research. “Energy producers are already reducing methane emissions because methane is a valuable commodity. It would be like issuing regulations forcing ice cream makers to spill less ice cream.”
The EPA needs to be abolished. Environmental regulations should be developed through class action lawsuits in the courts. That would still be fraught with political stupidity and greed, but it would be better than this bureaucratic dictatorship we live under.