Despite Mideast Tensions, Michigan Gas Prices Remain Cheap
Before America’s domestic fracking revolution, oil tankers on fire would have burned motorists
The latest data from the petroleum industry shows that crude oil production in the United States is at an all-time high.
According to the most recent report from the American Petroleum Institute, domestic crude oil production exceeded 12.2 million barrels per day in May.
The trade group said the new record is due to a several factors, including increased productivity in extracting oil and new pipelines that reduce transportation bottlenecks between oilfields and refineries.
“The historic milestones in U.S. oil production this quarter underscore the necessity of pipeline infrastructure to continued U.S. energy leadership,” said API chief economist Dean Foreman in a statement.
API’s production outlook is upbeat, despite tariff tensions and geopolitical events that have historically meant higher prices at the pump.
In the past, incidents in the Middle East such as the recent attacks on oil tankers in the Gulf of Oman would have triggered a worldwide spike in oil prices. But the increase in U.S. production, driven by fracking and other innovations, has changed the worldwide oil market.
Dan Kish, the senior vice president of the Institute for Energy Research, said in an email that American technology “succeeded despite our government, and [now] we’re now the world’s largest producer of oil and gas.” He added, “This produces good jobs on top of the obvious benefits to our economy and national security.”
The most recent figures also show that the U.S. produced 369.0 million barrels of crude oil in March, more than double the 170.7 million barrels it produced in March 2010.
GasBuddy.com is reporting gasoline prices as low as $2.29 per gallon in Michigan on June 24, despite the rise in Mideast tensions.
Some environmental groups and politicians have criticized the oil industry and call for greatly diminishing the role of petroleum in the economy. The Sierra Club, for example, says that “drillers exploit government loopholes, ignore decades-old environmental protections, and disregard the health of entire communities.”
Every politician seeking the Democratic Party nomination for the presidency in 2020 has introduced or endorsed a plan, such as the Green New Deal, that seeks to phase out crude oil production in the name of fighting climate change. Joe Biden was the latest candidate to release a climate plan that promotes other sources of energy like nuclear.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.