If Merriam-Webster could embed tweets in its definitions, you’d find this attached to the entry for “hypocrite.” In fact, CNBC thought this exchange between Joe Kernan and House Democrat Jan Schakowsky was so laughably hypocritical that they made sure to highlight it on Twitter. Schakowsky plans to hold a hearing on Big Oil’s supposed price gouging, but Kernan reminds Schakowsky that she and her colleagues spent last year haranguing oil executives to cut back production — including a vote to end fracking in the US.
Oddly, Schakowsky doesn’t want to discuss that:
— Squawk Box (@SquawkCNBC) April 6, 2022
In another measure of how dumb the “gouging” argument is, oil production is actually up this year, due in no small part to the fracking that Schakowsky tried to stop. Reuters reported three months ago that oil producers got spurred into higher production thanks to the higher spot and futures prices, which makes hash of Schakowsky’s economic paranoia:
As oil prices have surged past $80 a barrel, U.S oil and gas producers are paving the way for faster production by expanding new well completions in the Permian Basin of west Texas and New Mexico, the country’s top shale oil field, according to research data.
The number of pressure pumping units at work in the Permian rose 5% in December, over the previous month, analysts at Tudor, Pickering, Holt and Co said. Pressure pumping is one of the last steps required to complete a well.
The Permian will account for vast majority of this year’s projected boost in U.S. output of up to 900,000 barrels per day. Output fell last year to about 11.18 million bpd on storm-related cutbacks and as demand collapsed during the pandemic, according to government data.
Rising shale flows come as the Organization of the Petroleum Exporting Countries and allies have struggled in recent months to meet targets for higher production. Unrest in Kazakhstan and Libya have raised supply concerns, sending U.S. oil prices to more than $81 per barrel, from $53 a year ago.
“Pressure pumping” is fracking, which has turned out to be a cost-effective and efficient way to unlock gas and oil from shale. It’s more expensive than traditional drilling, so it’s more profitable when oil prices get above a certain level, but that level isn’t necessarily as high a $80 a barrel either. This demonstrates that oil companies are incentivized to produce more when prices rise rather than less, which is Econ 101, as it provides better profitability. It also demonstrates that fracking is a big key to scalable American production, necessary to meet demand spikes as well as strategic longer-term issues such as national security and undercutting prices from production from rogue nations such as Russia, Iran, and Venezuela.
Schakowsky and her fellow progressives want to shut down production and starve the oil and natural gas producers altogether. Now she wants to pose as a protector of the consumer, but Schakowsky’s policies would escalate the price of gasoline into the stratosphere while forcing everyone onto centralizing energy distribution that would continually require rationing at current non-fossil-fuel production levels. California already experiences that, thanks to its idiotic embrace of progressive policies in regard to production and use of petroleum and methane. Schakowsky’s hearing today will be an exercise in blame-throwing, and nothing more.