Rick Perry, now consigned to spinning on behalf of former House Speaker Newt Gingrich, this week demonstrated the energy-industry expertise he has gained during his service as Texas governor:
“As a matter of fact, perception is everything in this world we live in, and if the perception is Newt Gingrich could be the next president of the United States, that will have a worldwide effect, I will suggest to you, on the price of oil. And people who watch these markets and people who deal with these markets understand, that when you see the type of approach that he’s talking about — opening up federal lands and waters, opening up that pipeline from Canada, clearly giving incentives to drill in America for domestic energy, and then an all of the above policy, whether it’s wind or nuclear or whatever it might be — that will have a dampening effect on the cost of oil in particular and the other energy prices as well.”
That’s right, just the mere perception that Gingrich could be president would be enough to cause global oil prices to fall. But of course, in the extremely unlikely event that it did so, a lot of the higher-priced drilling operations in Perry’s home state of Texas would become uneconomical and cease operation.
Because, you know, that’s what happens. If oil drops to $70 a barrel, the incentive to look for it and drill for it falls as well, which drives the price of oil back up.
And as already documented, oil production in the United States has jumped by more than 20 percent in the last five years, while domestic consumption has fallen by more than 2 million barrels a day. Yet despite America pushing on both sides of the supply/demand equation, global oil prices have continued to rise.
Then again, those global oil prices have yet to experience the power of the Newt.
– Jay Bookman