Thread by @kurteichenwald

1. Time to address the latest @foxandfriends and Trump nonsense before this latest propaganda takes hold. Now, this may not be a Fox lie - knowing reality requires knowing basic information, and it may just be stupidity.

This is about US oil production, which has surged. Fox...

2...of course, attributes this to Trump and some vague "deregulation" as the cause. This is a head scratcher. Let's deal with all of the great Trump oil "deregulation."

There have been three elements of deregulation in the oil industry. Two of them - oil and gas fracking rule...

3...and outer continental shelf leasing - were put forward in the Obama administration. Unlike the simpleton view of government for Fox, deregulation doesn't happen with the wave of a magic wand. It takes time. Under the Administrative Procedures Act and other laws...

4...regulation revision must be proposed, then time for public comment, then time for meetings/hearings, then time to analyze impact. You don't just say "DRILL!!!!" It takes years. This is why 2 of the 3 deregulation rules considered during Trump started during Obama. Trump...

5...admin only proposed one. And, as expected - that one is not in effect yet. It was proposed earlier this year (apologies, I realize I said "outer continental shelf leasing as one of Obama's - that was the one Trump. Oil lease valuation was second, put forward by Obama.) So...

6...the great Trump oil production deregulation is: Two rules put forward by Obama, one by Trump that is not in effect. Sorry, Fox.

So, now that we dealt with the deregulation issue, let's deal with the fundamental, jaw dropping economic ignorance here. Oil production always....

7...goes up when prices go up. Why? Because the value of the asset (oil in the ground) goes up, meaning the differential between the cost of pulling it out of the ground and revenue from sales has gone up. I.E.: It's more profitable, so they pull it out of the ground.

But here..

8...the price has gone DOWN, while production goes up. The more the companies pump out, the lower the price should go. With no other facts than that, that means Fox and Trump are proclaiming oil companies are pumping out more oil because they are eager to make less profits....

9...that, of course is absurd. So, even with no other facts, basic economics tells you there is a massive change in demand that offsets the lower price. Hmmm...how could demand have changed?

Thanks, Obama.

In 2015, Obama lifted the decades-long restrictions on export of oil..

10...which led to the opening of the massive Chinese market to American oil companies. With more places to sell the oil, the direct impact on American companies from massive production goes down. Which means it is much more profitable to pump.

Of course, there are business and..

11...technological reasons this is all happening too. The explosion in this decade of shale production has been massive. (Yes, that started under Obama but he had nothing to do with it.) OPEC knows well the economics that Trump and Fox do not, so they had a simple solution:....

12...keep the market flooded with oil, driving down the price, in hopes of making the economics of drilling less attractive for American companies. But this did not work. Oil production has been going up in pretty much of a straight line, with one hiccup, since 2010....

13...notice when the hiccup turns around. 2015. After Obama allows exports to China for the first time in decades. Gee...wonder why that made oil production go up.

OPEC has been wrestling with this ever since, and their uncertainty - and attempts to flood the market in order...

14...to make oil production less attractive for US producers - has led to a pretty low level for gas prices. (Or, in Trump-world, it happened not because of OPEC, economics, and shale technology, but because he made "some calls" to anonymous friends in the oil industry to keep..

15...prices low. Or, in Fox-world, it is because of non-existent deregulation.)

Wrestling with this has been the biggest challenge for OPEC. But last month, OPEC decided to finally give up on the idea of attacking the American producers by flooding market and go back to...

16...cutting production to bring prices back up. What that means is that the American oil industry has won this battle against OPEC that started in 2010, exploded in 2015.

But notice the problem? In Fox/Trump world of lies , you can some it up: "Trump dereg cut prices"....

17...It is so easy to say, and sounds like it makes sense. People don't keep up on oil production deregulation, and economics is hard. Tarzan could understand "Deregulation cut prices." Even though it is false.

Reality - new tech helped shale production, and opening up the....

18...Chinese market offset the problem of low prices hindering production, which allowed oil companies to avoid traditional impact of falling prices on production, and exports have exploded because we have a new, massive buyer"...this is all a lot to explain. And that is how....

19...propaganda works. "Climate change is a hoax" versus "Here are a series of massive scientific papers that show this, and let's explain." Propaganda can be as simply as it needs to be. Reality is tough.

That is why we are in a post-reality world.