Pain at the Pump? NOPEC to the Rescue!

The biggest of 'Big Oil' is far from omnipotent

American Automobile Association data put the national average for a gallon of regular at $3.84 — 13¢ higher than a year ago. Prices are downright brutal in Arizona ($4.65), Washington ($5.03), and California ($5.83). Be thankful if you don’t live in Los Angeles County, where a gallon runs a whopping $6.12.

West Texas Intermediate is up about a third in the last three months. Goldman Sachs thinks Brent will “range between $80 and $105 per barrel next year.” And a top JPMorgan analyst worries that “the recent Brent price surge could continue upwards to $150 per barrel by 2026.”

Damn OPEC!

Well, not really. While the cartel affluent nations love to hate enjoys throwing its heft around the global petroleum marketplace, OPEC has never possessed unchecked, push-button power to make your visit to Cumberland Farms, Buc-ee’s, or Circle K a living hell. And the clout its members do have is about to be confronted by countries not known as energy players.

According to Irina Slav — probably the best petroleum-beat journalist working today — Namibia “may well be a new star in the final frontier of oil.” Reconnaissance Energy Africa, based in Canada, has access to 8.5 million acres in the so-promising-it’s-scary Kavango Basin. Adding to the onshore blessing, Shell and TotalEnergies have made “significant” discoveries offshore. (No wonder Namibia hopes to “double its economy by 2040.”) At the center of Africa, a French-Chinese-Ugandan project intends to add 230,000 barrels a day to the planet’s supply, “exporting the oil through a … heated pipeline that runs through Tanzania.” Moving north, earlier today Egypt, long a hydrocarbon underachiever, “launched … an international bidding round for oil and gas exploration in 23 onshore and offshore blocks.”

OPEC’s sole member from South America is Venezuela, where Marxism is capably destroying the energy industry. Brazil has emerged as the continent’s oil-and-gas champion, posting record production in July and a newly signed memorandum of understanding with China for greater “collaboration in the energy sector.” Argentina’s Vaca Muerta shale formation, one of the biggest in existence, might yield “more than 1 million barrels per day … by 2030,” according to a report a consulting firm released in May. Up on South America’s northern coast, Guyana is experiencing black-gold bounty to an almost embarrassing degree. In 2023, GDP per capita in the country will be “three times greater” than it was in 2019, “when oil production commenced.”

What’s to stop Earth’s emerging petro-powerhouses from joining OPEC, and becoming part of the “problem”? Nothing, really. And it’s fine.

In 1982, The New York Times called OPEC an “ungainly sort of club” whose members occasionally go “to war against one another” and regularly cheat “on official prices to raise sales while publicly accusing their fellows of exactly the same behavior.” Four decades later, the fractiousness endures.

In the latest issue of the Cato Institute’s Regulation, David Kemp and Peter Van Doren write:

Our evaluation of OPEC quotas concludes that members’ production exceeded their quotas nearly 80 percent of the time and, on average, members adjusted production by less than a third of the allocated reductions or increases. Additionally, for the last 30 years the short‐run variation of the oil production of three of the most stable OPEC members, Saudi Arabia, Kuwait, and the UAE, is similar to the United States, implying those nations are not utilizing an ability to rapidly alter oil production.

Finally, let’s not forget the crude colossus least likely to join OPEC. The Land of the Free is this close to climbing back to the level of petroleum production it notched prior to lockdown lunacy. And when the peak is reattained, there’s no limit to what comes next. Exhibit A: In June, ExxonMobil’s Darren Woods revealed that he has challenged his employees “to find ways to double the company’s per-well recoveries in its U.S. shale operations over the next five years.” For good measure, the CEO added, “We’re still only recovering about 10 percent of unconventional resources. And so there’s a lot of oil being left in the ground based on industry’s ability to tap into that and recover that oil.”

Even the climate-change paranoiacs at the Brookings Institution admit that petroleum “is plentiful, fungible, and easy to transport.” As long as all three descriptions remain accurate, there will be no broad “transition” away from traditional transportation fuels.

Sorry, Prius preeners and EV evangelists, but the world wants oil — and wants it as cheap as possible. It’s a reality no one can change. Not Greta Thunberg. Not Michael Bloomberg. Not Jennifer Granholm. And not Haitham Al Ghais.