Price Allocates Scarce Resources; Price Directs Production

Price Allocates Scarce Resources; Price Directs Production

Posted: Mar 20, 2022 12:01 AM

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In a free and competitive market, price always allocates scarce resources and price directs production. When allowed to function freely, the U.S. oil industry is a shining example of this dynamic.Oil is a driving force in our complex global economy, improving our daily lives.  Petroleum fuels our cars, heats our homes, and is found in thousands of everyday items from hearing aids to computers. About 80% of all oil consumed in America is produced by small U.S. entrepreneurial drilling operations. Without oil, our standard of living, life expectancy and potential for a brighter future would be greatly reduced.  Drilling for oil to produce gasoline is one of America’s best risk-taking success stories. Drilling for oil places large amounts of capital at risk acquiring permits for exploration, finding customers, building pipelines and so on. Entrepreneurs will take risks and drill for oil as long as they are confident in the potential outcomes. However, even at today’s higher prices, many in the oil industry are not confident in expanding operations due to the Biden Administration’s restrictive energy policies.ABSENT A FREE MARKETSince early 2021, Biden policies have reduced portions of clean U.S. energy from global markets with negative conseque …

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