The Oil Industry Doesn’t Need Government Protection
In 2008, a record-breaking spike in oil prices sent gasoline above $4 per gallon for months. Since then, world crude oil production has increased by an astonishing 15 percent. Even more astonishing, nearly 90 percent of that increase has come from just one small region mostly in west Texas—the Permian Basin—which extends hardly a few hundred miles from the old oil towns of Odessa and Midland.
West Texas is remote, severe, and often bleak—a land of rugged frontiers and self-reliance. The Republican Tea Party wave of 2010 and 2012 was fueled in no small part by the people who live there, and their undying hostility to government intervention.
How the world turns. Just last week, many of these free-market stalwarts appeared before the Texas Railroad Commission—the state’s oil and gas regulator—practically begging for government intervention to limit oil production.
[Read: The hidden effects of cheap oil]
We’ve seen this before. In 1986, after Saudi Arabia doubled production and sent oil prices into a tailspin, Texas producers got clobbered. They put enormous pressure on government to limit both oil production and oil imports. But their usual political allies, such as conservative Senator Phil Gramm of Texas, refused to intervene. In Houston, bankruptcies soared along with unemployment, while property values fell all over
