Gas prices are going down, but Feds halting permits. Why?

I left Dallas,Texas yesterday en route to Carlsbad, New Mexico to speak at Mayor Dale Janway’s Eddy County prayer breakfast. Flying out to Midland, Texas you look down and immediately see one thing: oil and gas drilling and exploration — and the area is booming, as evident by the countless private jets.

I was met at Midland and flown over to Carlsbad by a stellar American and developer Joe Brininstool – who by the way, is artificially keeping his business below 50 employees due to Obamacare.

We talked about the incredible boon in oil and natural gas in the Permian basin and what it has meant for Carlsbad — economic growth, just as you see in Midland and Cushing, Oklahoma. At dinner Wednesday night with the mayor, we talked about the future of Carlsbad and its sustained economic growth and infrastructure support for its expanding economy.

However Joe offered his concern about the lowering prices of oil and what that will in turn mean for Carlsbad, Midland, and North Dakota. He expressed his frustration confiding that he expects a 12 to 18 month reduction in output and economic disturbance and he wanted to know who is causing this to happen.

And so when I got back to my room — after a superbly delicious dinner at Lucy’s — I began looking for an explanation of what Joe was addressing.

And there it was, as reported by Reuters, “Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.”

“Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info Inc. showed 4,520 new well permits were approved last month, down from 7,227 in October. The pullback was a “very quick response” to U.S. crude prices, which settled on Tuesday at $66.88 CLc1, said Allen Gilmer, chief executive officer of Drilling Info. New permits, which indicate what drilling rigs will be doing 60-90 days in the future, showed steep declines for the first time this year across the top three U.S. onshore fields: the Permian Basin and Eagle Ford in Texas and North Dakota’s Bakken shale.”

“The Permian Basin in West Texas and New Mexico showed a 38 percent decline in new oil and gas well permits last month, while the Eagle Ford and Bakken permit counts fell 28 percent and 29 percent, respectively, the data showed. That slide came in the same month U.S. crude oil futures fell 17 percent to $66.17 on Nov. 28 from $80.54 on Oct. 31. Prices are down about 40 percent since June.”

So Joe’s frustration and concern was well-warranted and what are the subsequent tiered effects and unintended consequences? Well, if the permits being issued — by the federal government — slow down, that means employment slows down and production slows down. And as Joe told me, there will be an economic black hole for what he believes to be a 12 to 18 month period. Joe assessed that some smaller companies will fold, or perhaps be subsumed by bigger companies, but it will have an effect nonetheless.

Here in Carlsbad there’s one thing you can’t miss — every hotel is packed to capacity. Restaurants are full and there is traffic and activity because folks are working. Mayor Janway says tax receipts are at record highs – that’s how an economy is supposed to work. Not by the false narrative and politics of economic fairness — by way of excessive taxation and regulation — but rather by the success of a private sector exhibiting the highest degrees of investment, innovation, and ingenuity creating economic growth and related success and prosperity.

But why, why this screeching halt to our march towards energy independence and the ability to produce, consume, and export energy resources — not to mention continuing the lowering of gas prices? (I can’t wait to move to Texas to buy cheap gas!)

The answer is simple folks — the “man behind the curtain” is pulling the levers. And who is that man? Reuters answers that inquiry, “U.S. prices fell below $70 a barrel last week after the Organization of Petroleum Exporting Countries agreed to maintain output of 30 million barrels per day. Analysts said the cartel is trying to squeeze U.S. shale oil producers out of the market.”

My friends, this is why we must embrace the trifecta of security: economic, energy, and national. Effectively, OPEC is using energy as a weapon against the United States, which not only has an adverse effect on our economy but also advances their ability to support Islamic terrorism, which adversely affects our national security. Our goal should not be to kowtow to OPEC but force them out of the market, undermine their energy export and reduce them to being globally insignificant.

There is a reason why Vladimir Putin can take actions with impunity and Europe sits back — the natural gas pipeline. We can no longer be held hostage by OPEC and is consortium of despots, dictators, theocrats, and autocrats. Heck, even doggone ISIS is getting into the energy market — and we are slowing down our endeavors and inflicting a self-imposed decline?

This should be our policy: produce and consume our own resources, build more refineries, and open up the northern half of the Keystone XL Pipeline. Ensure we have solid reserves and then export what we can to crush OPEC.

A very integral aspect of the 21st century battlefield is energy resources — and with apologies to the radical progressive socialist environmental lobby, wind and solar cannot meet the demands right now. Heck, they require subsidies just to be competitive. And the senseless “War on Coal” must end, or else low and middle income American families will be the ones who suffer due to rising costs — especially as we enter winter.

We don’t need to be making deals and agreements with OPEC, because as I have learned being here, we are sitting on the American version of Saudi Arabia when it comes to oil and gas. And we’re already the global leader in coal. We need to develop policies that leverage these energy resources and assets to boost our economic growth, provide more employment opportunities for our citizens, and preclude our enemies from using energy as a weapon. It’s not that hard — tell OPEC to go “pound sand” while we “drill baby drill.”

As Reuters reports, “In addition to the Permian, Eagle Ford and Bakken, about 10 other regions tracked in Drilling Info’s data showed declines as well. The Niobrara shale in Colorado and Wyoming saw a 32 percent decline in new permits, while the Granite Wash in Oklahoma and Texas and Mississippian Lime in Oklahoma and Kansas retreated 30 percent and 27 percent, respectively.” Americans don’t shoot for second and we shouldn’t be advancing policies that reduce our energy production — we should go full bore, pun intended.

I’m quite sure someone is getting something from OPEC and putting their own self-interest and special interest above the American interest — politics instead of sound energy policy.

And who loses? These folks out here in Carlsbad among other places, who just want to work hard and make their country a winner, and a champion!


  1. While Leftist Progressive Socialists stir the pot and fan the flames amongst the younger generation out protesting for higher wages, they’re also killing jobs. Say wha..??
    Yup. That’s their way of thinking. They have no sense at all. None whatsoever.

  2. Is due attention being given the upcoming future 2016 election?

    In order to avoid the mediocrity that will invariably be brought forward, support AmericaIdea for the only GOP 2016 Dream Candidate.

  3. Allen West is a mouth breathing idiot.

    The article he cites as proof that the feds are throttling permits doesn’t actually say that. Here’s what it actually says:
    “Gilmer said last month’s pullback in permits was more about holding off on drilling good locations in a low-price environment than breaking even on well economics.
    ‘I think in this case this was just a quick response, saying ‘there are enough drill sites in the inventory, let’s sit back, take a look and see what happens with prices,’ ‘ he said.”

    It’s the free market at work Allen, the companies drilling the wells are pulling back on their own permits because they’ve got a good inventory but they’re not sure about their cash flow going into 2015. If the price of oil goes down then the value of each well decreases but its cost stays the same. The shale oil boom has been fueled by American exceptionalism and entrepreneurism and bald eagles and all that crap but it’s MOSTLY been fueled by the money made from selling the oil. Less money = fewer new wells.

  4. Regarding West’s quip about the developer he says is “artificially holding down employment under 50 due to Obamacare”. Joe Brininstool’s company is Brininstool Equipment Sales in Carlsbad, NM, which deals in large equipment sales, rentals and storage.

    Multiple company profiles indicate BES employee count to be somewhere between 10-19, including a profile updated by the BES manager herself. There might be a 2nd location employing 5 people.

    Yet Obamacare is “artificially holding down employment under 50” (roll eyes). Smells like more of Allen West’s partisan fairytale bullshit.

  5. The Arabs are trying to run our guys out of business, that’s why they have lowered the barrels of oil. If they can keep there fuel prices down lowe enough to were it costs our guys more to produce in comparison to what they are selling it for, wow…Good move, now we need to just STOP buying it from them and justy purchase our own oil…LETS run them out of business…no more IsIS no more war. Lots of work here at home YAAAA lets hope this happens


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