We recently wrote about "Saudi America," meaning that, thanks to increasing gas reserves, the US will soon no longer be so dependent on Middle Eastern oil as oil-fired manufacturing processes, like coal, are moving to the burning of gas. This will be a relief, since we’ve had bad relations with many countries in that part of the world. But the country that has REALLY had trouble with Middle Eastern dictatorships is the beleaguered democracy of Israel, but now that country has discovered oil, so it may be able to be energy-independent as well.
America is becoming the new Saudi Arabia, turning from an oil-consuming nation into a power producing nation. When Obama was elected, we were importing almost two-thirds of its oil. That number is down to below almost half and is still falling. What caused this? Fracking.
In the July 16th edition of the Financial Times, Edward Luce writes: "Those 5 million ‘green-collar jobs’ Mr. Obama once promised have been quietly forgotten. Most of America’s new jobs are on (gas) drilling rigs in places such as North Dakota, New Mexico and Ohio."
So why are gas prices so high? High international oil prices are bad news for everyone–even for oil-producing countries. People who have to pay $4 for a gallon of gas don’t have money to spend on other things, and eventually even gas consumption goes down, as people turn to other modes of transportation. For a long time, it was assumed that Middle Eastern countries were keeping prices high because they didn’t gave much oil left, but Saudi oil minister Ali Naimi says that isn’t the case–there’s plenty of oil.