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Munger: U.S. Should Sit On Oil And Gas Reserves Until OPEC Supplies Run Dry

The United States should delay extracting oil and natural gas from the ground until supplies in the Middle East run low, forcing countries who were previously our suppliers to pay a premium for American energy products, according to Berkshire Hathaway’s Vice Chairman, Charlie Munger.

I wish we weren't producing all this natural gas, I'd be delighted to just have it lie there untapped for decades in the future and have the Arabs pay extra once they use up their oil,” he said on CNBC this week. “Nobody else in America seems to feel my way, but I believe in deferred gratification, I don't think hastening to use our oil and gas is a good idea; I don't see any advantage.

The strategy is in stark contrast to the philosophies of major American energy companies as well as newly inaugurated President Donald Trump, who campaigned on making the U.S. energy independent by ramping up fossil fuel production and creating the jobs demanded by his base in the process.

Critics of American foreign policy say the U.S.’ hunger for energy played a role in encouraging the country’s political entanglements in the Middle East. Reaching energy independence would supposedly free leaders from the economic risks of intervening or stepping back from conflicts in the region, according to proponents of energy independence.

Related: Is The Bakken A Bust?

Trump’s push to disassociate the U.S. from oil imports from Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC), has led the kingdom to warn of a turbulent economic outcome for the rest of the world.

At his heart President-elect Trump will see the benefits and I think the oil industry will also be advising him accordingly that blocking trade in any product is not healthy,Khalid al-Falih, chairman of Aramco and Saudi Aramco Oil Minister, told the Financial Times in Marrakesh during the United Nations-led talks on climate change in November.

By Zainab Calcuttawala for Oilprice.com

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  • Raymond Kaus on February 17 2017 said:
    I believe the same way Mr Munger. .It hurts me to see the USA send our dollars to those countries that hate us, and sponsor terrorism. We have enough oil to supply our country. .Even if we have to pay more for a gallon of fuel,it better than supporting the middle East..
  • Oilracle on February 17 2017 said:
    --" U.S. Should Sit On Oil And Gas Reserves "--

    The US doesn't sit - we print money, go in debt to the foreigners and consequently rob children and grand children.

    We also use are hands (and printed money) to protect that oil over there - as Mr. Greenspan acknowledged publicly.
  • Joe Bergstrom on February 16 2017 said:
    Smart like a fox. Renewable energy will not fully power our world for a generation. Oil is a resource that has many uses not just burning it and in the future may have other uses we aren't aware of. Also technology may advance to negate some of the current environmental issues
  • Ross Chandler on February 16 2017 said:
    The world will have transitioned to renewable energy before OPEC reserves run dry.
  • Bud on February 16 2017 said:
    Given Mr. Munger' access to reliable research and information, his comments would seem to confirm what most energy professionals know: that renewables will only be a piece of a vastly growing energy demand this century.

    There are many U.S. Firms sitting on enormous reserves in the Marcellus/Utica basin but most are highly levered and trading above book. Marathon might be of interest if they sold off the international assets as part of a deal since those would create a PR headache and are worth nearly twice the net debt.

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