Friday, during an interview with Huntsville, AL radio’s WVNN, Rep. Gary Palmer (R-AL) explained how that while there may be benefits to the collapse of oil prices, the long-term impact meant terrible things for domestic fracking in the United States.
Palmer, the chairman of the House Republican Policy Committee, noted that his colleague Rep. Alexandria Ocasio-Cortez (D-NY) celebrated the drop in oil prices, which hurts these small oil companies born out of the fracking revolution.
One of the primary reasons for the decrease in oil comes out of a reported production dispute between Russia and Saudi Arabia, which has the two nations ramping up production and driving the price lower. That, combined with a slowdown in demand stemming from the coronavirus pandemic response, has oil prices at levels not seen since the 1970s when adjusted for inflation.
The Alabama Republican lawmaker speculated that the oil price war between Russia and Saudi Arabia might be deliberate, which has resulted in financial harm to U.S. domestic producers.
“AOC is out there celebrating with a little jig that oil prices have collapsed,” Palmer said. “And I’m sure most people are happy to be paying less than $2 a gallon for gas. But if you go back, to say, 1975 — what we were paying for gas in 1975 and see what that would come out to based on inflation, we’re paying net less for a gallon of gas adjusted for inflation that we were in 1975. It’s going to destroy the fracking industry, which is the very industry that brought us energy independence, enhanced our national security, and kept our energy costs low. And you’ve got AOC out there celebrating the fact that all these little oil companies — and it is not the big companies that have created the fracking revolution, it’s these small guys that are very capital heavy. They depend on being able to finance these new ventures — they’re not going to be there, and they’re not going to be able to get the money they need to operate if they do survive it because the Saudis and the Russians have collapsed the oil industry.”
“I just tend to think that was deliberate,” he continued. “I don’t think it was a disagreement over production.”
Follow Jeff Poor on Twitter @jeff_poor
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