While the United States’ 20 million barrel-per-day oil demand has never been higher, the current maximum production levels have hardly touched half this amount — even while setting new records due to cost-effective fracking technology — reaching 10 million bpd. America shares that level with co-world oil production leaders Saudi Arabia and Russia.
One would think U.S. demand would call for even greater expansion to close the crude oil demand gap. However, former President Barack Obama and 2016 presidential Democratic nominee Hilary Clinton made it quite clear in their joint party platforms that fossil fuel development blocked “climatological purity” objectives, to which the Democratic Party had committed as its major world-leading objective.
This has necessitated massive imports from the Mideast, especially Saudi Arabia, as well as Venezuela and Nigeria. These have no such climatological concerns.
Most recently, former President Obama blocked several attempts by Alaska to develop additional oil potential discovered in that giant state’s northern reaches. What makes this disapproval especially ludicrous is this negativity came during Obama’s “lame duck” period in his last weeks of power.
Fortunately, President Trump has strongly committed to real energy independence. This was first called for by President Richard M. Nixon in 1974 after Saudi Arabia embargoed crude oil shipments to the U.S. This action was due to America’s support of Israel in its successful defeat of an Egyptian/Syrian invasion in October 1973.
It’s estimated that the U.S. is capable of eventually nearly doubling its oil production to 16 million barrels per day. This belief was recently enforced by the huge discovery within the “Wolf shale” in the nation’s most productive oil region, the Permian Basin. This new find is estimated to contain 20 billion barrels of crude, the most concentrated reserve ever discovered. Comparatively speaking, its natural gas reserves are even greater.
Although the continued depressed price of oil at this time makes such a humongous discovery less exciting, it bodes well for America’s future as the world’s No. 1 energy development center.
America is doubly fortunate in having elected a president who will encourage the nation’s fossil-fuel expansion rather than stymie it. The latter would have been a certainty under the Clinton, who had previously declared the inhibition of coal, oil and natural gas as the target of her extremist climate control commitment.
World trade slump endangers
U.S. manufacturing comeback
Although President Trump is strongly committed to reversal of overseas U.S. job losses, he is being faced with drooping foreign export trade, which is increasingly spreading worldwide.
The re-imposition of stiff tariffs on incoming imports from major trading partners such as China and neighboring Mexico could invite retaliation, making the current trade slump even worse. Exports comprise 12% of America’s world-leading gross domestic product and account for 11.5 million American jobs engaged in the export of goods and services. These include such jobs as factory and warehouse workers, truck drivers, farmers, miners and paperwork shufflers, such as accountants.
This will likely force the president to forego withdrawing from the North American Free Trade Authority (NAFTA), although a demand for balanced tariff recisions will be forthcoming. But the Trans-Pacific Partnership, which appears thoroughly one-sided in favor of imports, will be taken off the table.
Instead, President Trump was expected to exert the power of his office to force cancellation of foreign job transfers, such as those that he was able to freeze (Ford Motor Co. and Carrier) even before he officially took office on Jan. 20.
Even at this early stage of President Trump’s official positioning, he is beleaguered from imposing an urgent export/import balance due to the growing worldwide trade slump that is now impacting the world at large. Annual global trade expansion, which had grown at a fast clip in the first decade of this century, has dropped off precipitously in the last five years.
But in order to generate the annual 4% growth that Trump promised as his campaign objective, this will have to come from cancelling Dodd/Frank, EPA excesses and other business-destructive regulations.
President Trump’s ambitious 4% annual gross domestic product increase will also depend on a much more rational tax structure. This has not been addressed in its totality since the mid-1980s during the midst of the Reagan administration. This was accomplished in conjunction with Democrat House Speaker Tip O’Neill.
By creating a much more effective manufacturing and overall production cost structure, the Trump administration will hope to generate thousands of new jobs in the arena of technical crafts that have been diminished by the decades-old closing down of technical education high schools throughout the U.S.
Is the U.S. 2017 investment
economy headed for records?
While aspirant presidential campaign promises prior to Election Day tend to wither as new administrations gain their footing, President Trump’s focus on domestic economic expansion will almost surely fulfill its maximum objectives. In fact, that aspect of “Trumponomics” that will most likely match President Reagan’s surge will focus on an economic breakthrough.
While foreign policy, Obamacare restructuring, immigration limitation and inner-city upgrading, etc., will get due attention, it’s the economic breakthrough on which the Trump administration will focus its most urgent attention. According to insiders, the following represent the major objectives to be attained:
1) A gross domestic product of goods and services increase of 3-4% in calendar 2017 is expected to be achieved. This compares to eight years of the Obama administration that fell short of a total 2% annual average, a puny level only reached in a handful of months.
2) Special attention will be given to the instigation of new independent businesses that lagged the shutdown of existing ones in 2016. This will be accomplished by encouraging more startup companies to get moving than ever before. Indigenous to such ambitious objectives will be a reversal of Dodd-Frank regulations and putting a halt to EPA mandates, as well as reversing those existing that are not absolutely necessary.
3) Fannie Mae and Freddie Mac, the government-controlled financial entities, will be instructed to favor small-business retention and startups with special loan incentives.
4) Multi-billions of government dollars will give domestic business startups and retention primary access to U.S. government loans, while placing new, severe restrictions on major U.S. corporations shifting production facilities offshore. Companion legislation will be put into place to severely cut back on U.S. government agencies, considered marginally necessary or totally so, by Trump administration experts.
5) While a broad spectrum of tax innovations will likely be passed for completion by year’s end, the U.S. corporate $1.5 trillion monetary reserves, festering in foreign nations, and growing, will be enticed for “home-bringing” with special tax incentives on an ongoing period rather than just a one-time deal. “Made in U.S.” will be heavily promoted by the Trump administration, while all trading deals will be revisited to make sure the U.S. is not short-changed as a mandatory requirement.
6) Supplemental unemployment support, which now represents two-thirds of Treasury Department spending, as opposed to one-third in the 1990s, will act as a target on new jobs, such as finally opening the Canadian Keystone pipeline, massive infrastructure development of roads, highways, railroad tracks, bridges, dams and renewable energy facilities that are adjudged to be profitable in the long term by government experts.
7) A major restructuring/expansion of the nation’s military capabilities to again make America the military superpower it was at the turn of the millennium will match a much-needed comeback as happened with President Reagan.
This ambitious program likely will prompt America’s investment community to shift much of the funds previously committed to finance emerging nations. This will make domestic manufacturing equities much more attractive, consequently attracting billions previously invested offshore. This also will strengthen emerging nations’ business, depending on U.S. monetary input.
How effectively this super-ambitious program is implemented will be revealed in future columns.