On Saturday, a new installment of the “Verdict with Ted Cruz” podcast was released on YouTube, and the focus was on energy – not just how oil production has been impacted by the COVID-19 pandemic, but how a play by Russia and Saudi Arabia have disrupted the industry.
Co-host Michael Knowles of The Daily Wire first asked: “I think for most people, the interaction we have with the oil industry is when we fill up our gas tanks, so low oil prices are not necessarily a bad thing when we look at it. What are we missing here?”
Sen. Cruz (R-TX) replied, first noting that as a result of the COVID-19 pandemic, millions of Americans have lost their jobs, and the price of oil per barrel has plummeted.
The senator then explained that this could have a ripple effect leading once again to the United States relying on “foreign countries” for oil:
The consequence of that is it potentially risks bankrupting most, if not every, American energy producer, and particularly in my home state of Texas, that’s devastating. But if you end up seeing American energy producers driven out of business, that also has massive implications in terms of you and me paying higher prices at the pump in years to come, and also geopolitically making us dependent on foreign countries in a way that we just now managed to get free and independent from.
Cruz continued, saying that a group of senators had a conference call with the Saudi ambassador a couple weeks ago, and that it got “bare-knuckled” and “candid.”
The senator explained in no uncertain terms to Saudi Arabia that they were “taking advantage of a global health pandemic to try to screw and bankrupt people across Texas” and other states. Their excuse was apparently “Russia.” Cruz replied that if they wanted to be treated like Russia, the U.S. could pull troops and Patriot missiles from Saudi Arabia if need be.
The podcast conversation then shifted to include Wil VanLoh, CEO of Quantum Energy Partners.
Sen. Cruz noted that the United States only recently became, for the most part, energy independent, and how it was technological advancements by smaller oil industry players that got us to this point.
When asked if energy companies can get back to where they were prior to the recent price drop, VanLoh explained how American energy independence is critical, and how the Saudis and Russians have attempted to interfere:
Right now, it’s not looking good. It’s not looking good for two reasons. One was Saudi and Russia have decided they were going to basically launch a market share war on the U.S., and as Senator Cruz said a minute ago, you know, the U.S. went from being a huge energy importer … we imported more than 12 million barrels a day less than a decade ago to literally over the last six months or so, we, on any given week, we will export or import a few hundred [thousand] … think about the impact on our economy, that’s depending on the price of oil, but say at $50 oil – that’s about $250 billion a year that stays here in the U.S.
Sen. Cruz went on to talk about the impact to the energy sector outside of COVID-19:
Then you’ve got a second component, which is you have the Saudis and the Russians, right as coronavirus is breaking, deciding this is a great opportunity to screw the Americans, to bankrupt the American energy business – and listen, what you’re doing, drilling in West Texas shale, the Saudis and Russians have hated it because you pass them up with America as the top producer, and so they’re sitting there, if I understand this right, they’re taking this as an opportunity, “Alright, we’ve got a crisis. Let’s put these guys out of business. Let’s bankrupt them so that when all is said and done, we’re the only players left in the game.”
VanLoh noted that the rise of the American shale revolution “challenged OPEC supremacy, and it challenged Russia supremacy.”
“So what they’re doing – it used to be what we would call an antitrust law predatory pricing in that … when they flooded the market with oil and they announced they were going to do that, and drove the prices way down, they were taking a big hit themselves, but they were doing it to bankrupt their competitors and then sweep in and dominate the market,” Cruz clarified.
Cruz later asked VanLoh about what happens environmentally if “independent energy producers go out of business, the economy gets going again after the crisis, and we’re dependent once again on on the Middle East for oil.”
The CEO stated that even if U.S. oil and gas are out of business, people will continue to use use oil, be it in cars, planes, or consumer products made using hydrocarbons. All of this would result in dependence on foreign sources, which would cost the U.S. a great deal of money and “significant geopolitical influence.”
“Fueling the Middle East with billions of American dollars is not good for keeping America safe,” Cruz added.
Check out the episode, which contains much more than what was written about above, here: