The current presidential campaign hinges on jobs and the economy. Yet most of the debate has centered on peripheral issues such as the Bush tax cut, when there is a Tyrannosaurus in the room that is being virtually ignored. That monster is the EPA.
The EPA is today the primary enemy of economic growth in the United States, and through it the world. The damage that it has done, is doing, and threatens to do in the future is immense. Virtually since its birth in 1970, the agency has committed one atrocity after another. As one of its first acts after coming into existence, the EPA banned the vital pesticide DDT. (This was done is direct defiance of the investigatory court findings of federal judge Edmund Sweeney, which showed that DDT was not a danger to humans or wildlife.) As a result, large regions of Africa and Asia were given over to malaria-spreading mosquitoes, killing tens of millions of people and aborting economic development.
From 1859 to 1971, the U.S. oil industry grew virtually continuously, in the process serving mightily to drive our economy and win our wars. But that growth was stopped dead in 1971, and sent into decline thereafter as the advent of the EPA and the accompanying National Environmental Policy Act made it increasingly difficult to drill. The global economic and strategic catastrophe this has caused can be seen in the graph below, where I show U.S. oil production, OPEC oil production, and non-U.S., non-OPEC oil production from 1960 to the present. The graph shows that U.S. oil production grew at an average rate of 3.2 percent per year during the 1960s, peaking at 9.6 million barrels per day (mpd) in 1970. The growth of OPEC production, meanwhile, which had been extremely rapid during the 1960s, came to a screeching halt in 1973, when the OPEC powers replaced the previously dominant Seven Sisters’ policy of expanding production to fuel the world economy with an alternative policy of constricting production to loot the world economy. As a result, OPEC production, after plummeting and then slowly rebounding, is still where it was in 1973. Thus the entirety
of the increase of world oil production over the past four decades — during which time the world economy has doubled in size — has come from non-OPEC, non-U.S. sources. As the graph shows, this has increased at a rate of 3.4 percent per year since 1970, essentially the same as the average U.S. growth rate from 1960 to 1970. With the green line on the graph, I show how U.S. production would have developed had it matched other non-OPEC sources and continued to grow at its pre-EPA rate. In that case, instead of producing 5.7 mpd today, we would now be producing 35 mpd. Together with other non-OPEC production, this would have totally marginalized OPEC and constrained oil prices below $30 a barrel today, with associated gasoline prices of $1 to $1.50 per gallon. Just as they did in the 1950s and 1960s, such low oil prices would fuel dramatic U.S. and global economic growth.
Instead, however, because of the de facto collusion of the EPA — which has sabotaged America’s oil industry and prevented the use of clean-burning methanol fuel, which we could readily and cheaply make from abundant natural gas or coal — OPEC has been able to operate as a highly effective cartel, imposing a massive and extremely regressive tax not only on America, but on the entire world economy, and using the proceeds to fund the promotion of terrorist movements and the development of nuclear weapons intended for our annihilation.
Actual U.S.production is marked with the lavender squares. Hypothetical U.S. production continuing at pre-EPA growth rates is shown by the green cross-hatched line. Note that such growth was in fact achieved by other non-OPEC countries.