Fracking hurts Russia, and Vladimir Putin knows it. American oil has changed the world over the last three years.
For three years, the media and the national Democrats got carried away on their belief that Donald Trump had colluded with Russia's wish to meddle with our elections.
That was not true, as the Mueller report eventually revealed. What was true, was that the Russians did want to and did attempt to meddle with the 2016 elections. But most of that effort was psy war, not direct collusion, an attempt to undermine Americans' faith in all of our elections and to suspect one another, and not to support any particular candidate over another. The Russians spent a grand total of $247,000 on Facebook ads, a sum dwarfed by the tens of millions the Trump and Clinton campaigns spent, and dwarfed again by the $500 to $600 million Mike Bloomberg just finished spending on his wildly unsuccessful run for the Democratic nomination. There is no plausible argument for Russia's paltry Facebook troll spending making any difference to Brad Parscale's ingenious social media campaign.
Bloomberg's spectacular flameout should kill off the idea that the Russians or anyone else could buy enough ads to buy our elections. But it won't. And that failure also doesn't mean the Russians won't find another way to attack and weaken the United States.
In fact, they appear to have found one and have deployed it.
Over the weekend, OPEC+ and Russia met in an attempt to arrest the freefall in oil prices due to weakened demand from the COVID-19 outbreak. Those prices are hurting all oil producers, particularly the Saudis and the U.S. The Saudis reportedly sought to reach an agreement across OPEC and Russia to cut production. This would reduce supply, allowing the price per barrel to stabilize and eventually rise.
CNBC reports the Russians said "nyet."
OPEC members laid out a proposal to further cut oil output quotas by as much as 1.5 million barrels per day.OPEC itself was aligned on the deal, but non-OPEC member Russia said “nyet,” effectively killing it. A source inside the negotiations tells me that as the two sides worked out production cut plans, in the end the “red lines weren’t even close.” The source added that the Russians “definitely don’t want to continue to support shale” at least in part because the Rosneft sanctions were still “too raw.”It was only three weeks ago that the Trump administration imposed sanctions on Russian oil giant Rosneft for transporting Venezuelan oil. Secretary of State Mike Pompeo believes that in helping Venezuela sell oil, Russia is effectively propping up the Maduro regime. Rosneft is run by Igor Sechin, a former employee and close friend of Putin.
That lays things out pretty clearly. Trump the accused Putin puppet has instead sanctioned Putin's pal to, among other things, try to free Venezuela from the kind of socialists who would populate a Bernie Sanders administration. The Saudis have since raised their output and cut the price per barrel to China, mostly to annoy Putin. So we have a price war over the world's dominant energy source. (Side note: even "renewables" would be vulnerable to such price wars, as they depend on extensive mining for the elements necessary to make solar panels, windmills and other essential components such as batteries. We would just be fighting over different things that come out of different holes in the ground, and China would have a whole lot more say in the matter. It dominates the world's rare earth minerals.)
Putin gets at least a two-fer. He does get to continue propping up the socialist dictator Maduro in Venezuela, who among other things is an enemy of the United States on our doorstep. He also gets to hurt American and in particular Texas oil producers, that's what the reference to "shale" is getting at in the quote above. Putin has long feared the rise of U.S. oil thanks to the fracking boom mainly in West Texas. The boom in the Permian Basin has dramatically shifted the balance of energy power globally, away from OPEC and the Russians and toward a new oil power, the United States. Since the shale boom took off in the Trump years, a newly assertive America has been making deals with eastern Europe and other nations to wean them away from Russian energy and toward our own, and has become less vulnerable to instability around the globe. At the same time, Trump has been establishing a new alliance with India, which has implications for Russia's regional and global position.
Now Putin has American energy in his crosshairs. While low energy prices are great for consumers, energy prices dipping too low will cause major layoffs out in the oil patch itself. This will directly hurt those producers, and soon enough will hurt the secondary firms that serve them and ripple out across the economy. What happens in Midland, Texas won't stay there. Texas, the job-creating engine of the American economy over the past decade, will suffer. A sustained downturn could have implications for the elections in the fall.
August Pfluger, retired F22 pilot and now the presumed congressman from Texas Congressional District 11, which covers much of the oil producing region of West Texas, noted the direct implications of Putin's assault in a Facebook post today:
Russia is making a serious and dangerous mistake, failing to agree with proposed OPEC+ production limits and starting a price war that will be destructive to the Permian Basin and America. The Permian Basin is a national security asset and an economic engine for our country — sustaining more than 440,000 jobs and contributing more than $60.2 billion to the State of Texas alone. Now is not the time for a price war.
National security and the economy. The Democrats have happily threatened both every time they have threatened to ban fracking. They have heeded the dire fracking tales told by green groups funded by and colluding with Putin. The Russians understand the stakes all too well and are only too happy to do what they can to hurt the American oil patch.
Bryan Preston is the author of Hubble's Revelations: The Amazing Time Machine and Its Most Important Discoveries. He's a writer, producer, author, Texan, veteran, and conservative strategist.
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