Oil - Obama's Petrostate or His Problem?

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The petroleum sector is, almost without debate, the single largest economic and political force in the world. Petroleum can used to leverage peace and prosperity, but it can also be used to dictate power and to decimate entire economies and political entities. Which raises my personal concern over how President Obama will use the current oil and natural gas boom in the US.

Fracking is changing the game here in America. If the game changes here, then it will not be long before it changes globally. It’s been longer than I can recall since I last read anything about the most expensive cities in the US. At least in terms of rental apartments, in Williston, North Dakota one bedroom apartments are going for just under $2,400 per month. Williston is a town of approximately 14,000, in a state that is the third least populated in the entire country. It has been correctly described as “an oil patch,” and it has become the most expensive city in the US in which to rent an apartment. If the impact on one small city is that great, how much more upon the rest of the world?

At the risk of having my taxes audited, I need to make one thing perfectly clear – I do not trust Barack Obama farther than I can spit, and the last time I tried to spit, it dribbled down my chin. My concern is that he may soon be able to make America energy independent. What happens then? Will the results be good or will they be bad?

Obama Oil, and the US

The president is already having to balance the issue of the benefits of fracking versus the Gestapo-like bureaucracy of the Democratic Party’ pride and joy, the Environmental Protection Agency, an agency that has never before enjoyed the power it has possessed under the Obama regime. This is a problem, because the EPA appears to have run so far amok that it can’t help itself from doing all that it can to keep petroleum recovery in the US from increasing, despite the fact that former Secretary of the Interior under Obama, Ken Salazar recently said, “We know that, from everything we’ve seen, there’s not a single case where hydraulic fracking has created an environmental problem for anyone. We need to make sure that story is told.” In other words, Obama has dissension in the ranks.

Obama, Oil, Europe and Russia, et. al.

Obama likes to tell other nations what to do. He has apparently forgotten that his responsibility is the 50 United States. He publishes bully threats against any smaller nation with whose policies he disagrees. He who has the most oil has the most influence and can hold the world under his thumb, should he so choose. I am at once happy for the US tapping our massive petroleum resources, but I am just as much concerned that it could empower Obama to entice more and more nations into his web by offering an apparently limitless supply of oil and natural gas. The more America becomes oil independent, the more the potential that other nations will become dependent on cheap US oil. This could destabilize the entire European political stage where many nations have been dependent upon Russian oil. I sense that could irritate the Russian government sufficiently that they have to find a way to keep their sphere of influence intact and strong.

Obama, Oil and the Middle East

Obama is trying to establish his legacy as the person who brings peace to the Middle East, particularly between Israel and the PLA. His determination to impose a peace place upon a nation and an ethno-political body, neither of which want it, is clear from his threat to boycott the nation that has been America’s friend, should they not comply with his wishes. (To be clear, it is possible that both groups want peace, but it is clear that neither want it on Obama’s terms.) Ironically, Israel is also becoming a petroleum-exporter, so that is just one more thing for which she will not need outside assistance. The point is that should Obama try to wield his power, he may find himself either out of the equation or entirely destabilizing an entire region of the world that is not his to govern.

Obama, Oil and Investors

I wish that I had more to offer in the way of advice, but I do have one simple thing to say to investors. Frack beneath the headlines. Oil and gas stocks may become more volatile, not because of exploration and costs, but because of how those commodities are increasing more likely to become the stimulus for great conflagration. Spend more time reading the news in detail than in tracking charts in this sector. This could become very interesting.

For those of you who are thoroughly confused, I said “Obama’s Petrostate,” not “Obama’s Prostate.”


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