Jason Isaac - Is The Oil Drop A Real Breakthrough?

Oil prices just plunged after Iran signaled the Strait of Hormuz is open but the U.S. blockade remains in place. Markets are reacting fast, but the bigger question is whether this is real progress or just a temporary move in a much larger standoff.

Jason Isaac, CEO of the American Energy Institute, joins the program to break down what’s driving the price drop and whether Americans can expect lasting relief at the pump.

Transcript

SPEAKER_00 0:03

Welcome back to the program. It's a pleasure to be with you, and I'm glad to get to your phone calls and emails. Jason Isaac joins me now, CEO of the American Energy Institute. Jason, I guess I was thinking about that time when President Trump said, you know, we're going to win so much, you're going to get tired of winning. And for the last six weeks, during this confrontation with Iran, I've preferred to call it a confrontation rather than a war, even though the Democrats were happy to start saying this endless war. And they were saying that a few days into the conflict in early March. And I said, it's only a few days old. Are you really calling it an endless war already? And now we're looking at basically the end of it in less than two months? Give me an idea and give my audience an idea of where we're headed with all this.

SPEAKER_01 0:47

It's really mind-blowing to see Democrats concerned with gas prices. I mean, these are the people that support the Green New Deal that want the price of gas and electricity to necessarily skyrocket, as President Obama once said, and now they're all of a sudden concerned about the cost of gas. It's hilarious. Especially in your state where they have a low carbon fuel standard, which Katie Porter just came out and said that's the reason our gas prices are as high as they are, is because we have this thing called a low carbon fuel standard. Well, you'll appreciate this. We just submitted comment to the EPA, a petition for them to get rid of the low carbon fuel standard in Oregon, Washington, and New Mexico, because they don't have the constitutional authority to do it. But yet you're paying about 15 to 20 cents more per gallon, uh, and that's even going to come down. You might want to give it a couple of days, barrel of oil, eighty dollars. Now it was 120 just a couple of weeks ago, so a significant drop already. We're going to see prices come down in a matter of days at the pumps, and that'll be good for consumers.

SPEAKER_00 1:44

I mean, how fast is this going to come down? Jason, if we say the benchmark we're we're below four, or it sounds like we're headed below four by Monday, how f how how fast could we hit three bucks again?

SPEAKER_01 1:56

I I really suspect that you're gonna see that probably happen next week. And you're gonna have an attorneys general around the country have already warned. It's been weeks ago. They're saying that prices better come down as fast as they went up, or you're gonna be under an investigation for price gouging. Uh and so there's that threat. So if the prices are coming down at the refinery, that should get passed on to consumers, and their prices are coming down at the refinery. Uh and I'm not even sure they rose at the refinery that much. Many of these refineries hedge and they buy oil on contracts long-term out. And so they've been paying$60 to$70 for a barrel of oil, even as the costs have skyrocketed. But futures markets, people got scared, they panicked. We need to see the prices come down to the pump, and I suspect they will rather quickly.

SPEAKER_00 2:40

Okay, so I want to ask you a question, sort of more theoretical, and I'm I'm reasonably sure you don't. Maybe you do have the answer to this. But I mean, I I've put to my audience, I've said, look, if somebody told you we're gonna be out of the radio business ten years from now, the folks who employ me, the folks who run my show around America, if I said to them, you're gonna buy a bunch of transmitters and new equipment for your outfit, they'd say, no, no, we've been told the whole business is gonna be gone in ten years, why would we put a dime into it? I think about that in terms of the oil business, and when you had jokers like President Otto Penn saying, we're gonna be out of oil in ten years, that ridiculous thing he said at the State of the Union address a few years ago. And I said, if somebody told you that and they're from the government, would you go out and spend billions of dollars to build state-of-the-art, modern, efficient refineries, or would you say, let the old stuff run until it falls down, because we're we're told they're gonna put us out of business anyway? If America started to rebuild or build brand new from scratch to the best technology today, refineries to create the fuel that I'm sure we're still gonna be burning 50 years from now. If we could give the industry that kind of knowledge, yes, we'll be in gasoline and diesel for the foreseeable future. How much more efficient could we make the entire system and how much cheaper could we make it?

SPEAKER_01 4:08

Incredibly more efficient and much, much cheaper, delivering energy that's affordable and reliable to not only Americans but people around the world that desperately needed to get lifted out of poverty. With the first refinery in the U.S. in 50 years, was just announced in Brownville, Texas. We should have been building refineries left and right. China has. China's been expanding their coal-fired electric generation fleet to power those refineries because it's cheap. You can keep on-site storage for months of coal. It's it's an incredible source. I wish they'd use the pollution control technology that we do here in the United States. Certainly have it. They've sold all that in technology from us. They have that as well. That's why we've become world leaders in clean air, number one in access to clean and safe drinking water, and that's going to power our reindustrialization. Coal, natural gas, and nuclear are really the backbone of an affordable, reliable electric grid. If we can continue on the path that we are to bringing back that reliability when it comes to electric generation and not a misallocation of resources on expensive things like wind, solar, and batteries, we will bring the cost of energy down even further, and that'll be great for consumers throughout the world.

SPEAKER_00 5:19

You know what I'd like to see, Jason? Because I've been on a lot of different Indian reservations. I'm not Indian. I've got some family members who have who are part Indian. They are outside the rules of the rest of the country. I mean, I was asking some tribal members one time, I said, you're not held to EEOC or EPA or any of that. And they said, no, we can we can do things right, but we don't have to be held to the rules. I'd love to see a bunch of reservations and a bunch of tribes say, it's not just gonna be casinos. We're gonna build nuclear plants and we're gonna build refineries and we're gonna build uh uh if they're near water uh liquefication of uh of of LNG, and we're gonna ship this stuff everywhere, and we're gonna make bank and we're gonna produce electricity. Can you imagine if a res that doesn't have much going for it, but they said, but if we start refining oil and gasoline, if we start producing energy and then selling it to the states around us, can you imagine what an advantage they would have not being strapped down by all the ridiculous regs of Washington, D.C.?

SPEAKER_01 6:26

It'd be incredible for them as long as there are not any states near like California, because this has actually happened. The Navajo Reservation had a coal-fired power plant. It was one of the most efficient, beautiful power plants in the United States, in Arizona, and California said, you know what, we're not going to buy coal-fired electricity from you anymore. And it forced the early retirements because they lost their contracts. So they lost their customer, and it resulted in the loss of hundreds of jobs. So this is absolutely appalling. But refined goods, yes, they should be going out and building refineries, uh, and and you're right, liquefaction facilities, they should be doing this. It's almost like what the federal government's doing in California. They're forcing the turning back on a pipeline because California imports over 70% of the oil that it uses from overseas, 31% from Iraq, about 28% from Brazil. I mean, this is appalling. These places that have poor environmental records, they have poor human rights records, and that's where California is getting their oil because they refuse to get it from their own state, which is kind of like what the United Kingdom does. It's appalling. They're sitting on a plethora of it. The federal government says we're going to turn this pipeline back on and we're going to start producing Californian oil again. And it's great for the consumers and the refineries there that are left in California.

SPEAKER_00 7:40

Jason, I was hoping you were going to tell me that they were making electricity and selling it to everybody but California. And just tell the Californians, yeah, we could be, you could be getting 15 cents a kilowatt hour, but we're selling all that to Arizona. We're selling it to New Mexico. We're going to sell it to everybody, and you guys, you guys can have your 40 cents a kilowatt hour and see how that works out when you have to crank up the air conditioners in August. That's Jason Isaac. Jason is CEO of the American Energy Institute. Jason, it's always a pleasure to have you on the program. Glad to get your calls at 866-Hey Lars. That's 866-439-5277. Send your emails to talk at LarsLarson.com and you're listening to the Lars Larson Show.