Low gas prices come at a high price for the Texas economy

Over the holiday break, families took to the roads to reunite with loved ones.

The excitement people felt upon seeing gas prices below $2 was palpable, and in at least one way, measurable.

Facebook, for the first time since its inception, featured timelines riddled with pictures of price signs.

Did Kris Kringle finally reward us for enduring a long, hard six-year slog?

But fairy tales have nothing to do with the price drop.

These low gas prices are a direct result of actions by the Organization of Petroleum Exporting Countries, which is playing a high-stakes game of chicken with the American oil and gas industry and our national economy.

Texas’ oil and gas industry has successfully increased overall production with the help of a streamlined regulatory environment.

However, OPEC countries, such as Saudi Arabia, have flooded the market with crude in an effort to discourage successful American drilling, using artificially cheap fuel as their weapon.

OPEC’s goal is to sacrifice profits today in hopes of maintaining their dominant market share down the road.

On Dec. 21, Saudi Arabian Oil Minister Ali Al-Naimi said OPEC plans to keep over-producing oil, even if prices fall to $20 a barrel.

Keep in mind that today’s prices have dropped almost 60 percent in just six months.

OPEC will force low prices until their competitors are out of business and then raise the price to whatever profit margin they desire, which will certainly be higher than a stable free market would otherwise have dictated.

OPEC’s success depends entirely on a weakened American oil and gas industry, and, unfortunately, we’ve already begun to see an impact to our state economy.

Fuel hovering around $45 a barrel has forced many companies to make tough personnel decisions — cutting back on new hires and in some cases even laying off workers.

Saudi Arabia used this tactic in 1986 and successfully dropped oil prices to near $10 a barrel before collapsing the U.S. oil and gas industry — giving OPEC dominant control over the global market once again.

OPEC will do everything it can to weaken the industry and eliminate competitors.

To be successful, the Texas oil and gas industry needs a stable, reliable regulatory environment where drilling permits are issued on a consistent basis.

As a member of Texas’ energy authority, the Railroad Commission of Texas, I have done everything in my power to help create a safe and dependable environment that benefits both industry and consumers.

Failing to maintain this balance would risk harming America’s greatest resource in its fight against terrorism and jeopardize the growth of the economy.

The key to America’s security and prosperity is energy independence.

A strong energy industry makes America less dependent on oil and gas producing countries that actively support terrorism and allows our allies to rely less on oppressive and authoritarian regimes like Russia and Venezuela.

The last thing the industry needs right now is to be kicked while it’s down.

Unfortunately, that is exactly what President Barack Obama and his Environmental Protection Agency are in the process of doing.

In the coming months, the EPA intends to propose at least nine rules that will place unfair, unnecessary burdens and regulations on an industry that is already struggling, thus giving foreign regimes a heavy advantage and harming the American economy in the process.

In a March 2010 weekly address defending his focus on alternative energy, the president claimed, “We can’t just drill our way to lower gas prices.”

He is wrong. America did drill its way to reasonably lower gas prices.

Texas’ oil and gas industry has once again become a significant player, but if the president imposes these rules, America will have to fight the world’s heavyweight oil producers with one hand tied behind our back.

Americans need to realize the impact Texas’ energy industry has on the entire country.

As an energy regulator in Texas, I am calling on our leaders to begin a national dialogue that finds real solutions to this looming economic crisis.

Because as Texas goes, so goes the nation.

David Porter is one of three members of the Railroad Commission of Texas.

This story was originally published January 13, 2015 at 5:44 PM with the headline "Low gas prices come at a high price for the Texas economy."