Right-wing media have predictably blamed a recent rise in gas prices on President Obama’s energy policies and have called for more offshore drilling, claiming he has allowed America to remain “increasingly dependent” on oil imports from “unstable parts of the world.” However, experts agree that it’s “not credible” to blame Obama for the gas price spike, offshore drilling would not substantially decrease prices, and U.S. domestic oil production has in fact increased under Obama.
Right-Wing
Media Blame Higher Gas Prices On Obama, Falsely Claim Increased Dependence On
Foreign Oil, Urge Drilling
Wash.
Times: Obama Has Spent
“The Past Two Years Bringing Back These Higher [Gas] Prices.” From a March
30 editorial in The Washington Times:
President Obama's promise Wednesday to do
something about rising gas prices was drowned out by the giant sucking sound of
American dollars being funneled into OPEC pockets. Not that many
expected his plan to make much difference anyway. A president who, as a
candidate, said he didn't mind high fuel prices is not likely to be the one
leading the nation toward energy policy sanity.
Mr. Obama, feeling the heat from a 28 percent
spike in the cost of gas at the pump over the past year, announced a formidable
goal to slash oil imports. “That is something that we can achieve,” said the
president. “We can cut our oil dependence by a third.” He pledged to do this by
boosting domestic oil production along with a scheme to use more natural gas in
the nation’s public transportation fleet, command greater fuel efficiency in
cars and trucks, and provide larger subsidies for production of biofuels.
While the president was making his energy
pitch, the Financial Times reported that the Organization of
Petroleum Exporting Countries, dominated by nations hostile to the United
States, is on track to rake in more than $1 trillion in oil revenues for the
first time ever. Pump prices now average in excess of $3.58 with some regions
facing rates in excess of $4. Each 1-cent increase at the gas pump makes
consumers across the country $1 billion poorer collectively.
After spending the past two years bringing
back these higher prices, Mr. Obama has little credibility promoting what he
claims to be solutions. Following the Deepwater Horizon oil spill in the Gulf
of Mexico last year, the Obama administration imposed a ban on oil drilling in
the Gulf and both coasts. He also brought the issuance of new drilling permits
to a virtual standstill. Nevertheless, the administration has gone to great
lengths lately to convince Americans that the oil production decline is the
fault of the oil companies. [The Washington Times, 3/30/11]
Palin:
Obama’s “War On Domestic Oil And Gas Exploration And Production Has Caused Us
Pain At The Pump.”
Writing on her Facebook page, Fox News contributor Sarah Palin wrote:
It’s unbelievable (literally) the rhetoric
coming from President Obama today. This is coming from
he who is manipulating the U.S. energy supply. President Obama is
once again giving lip service to a "new energy proposal"; but let's remember
the last time he trotted out a "new energy proposal" –
nearly a year ago to the day. The main difference is today we have $4 a
gallon gas in some places in the country. This is no accident. This
administration is not a passive observer to the trends that have inflated oil
prices to dangerous levels. His war on domestic oil and gas exploration and
production has caused us pain at the pump, endangered our already sluggish
economic recovery, and threatened our national security. Through a process of
what candidate Obama once called "gradual adjustment," American consumers have
seen prices at the pump rise 67 percent since he took office.
Meanwhile, the vast undeveloped reserves that could help to keep prices at the
pump affordable remain locked up because of President Obama's deliberate
unwillingness to drill here and drill now. We're subsidizing offshore drilling
in Brazil and purchasing energy from them, instead of drilling ourselves and
keeping those dollars circulating in our own economy to generate jobs here. The
President said today, "There are no quick fixes." He's been in office for
nearly three years now, and he's about to launch his $1 billion re-election campaign.
When can we expect any "fixes" from him? How high does the price of energy have
to go?
[...]
Since I wrote the above [a March 31, 2010,
post at the National Review Online], we have even more evidence of the
President's anti-drilling agenda. We have the moratorium in the Gulf of Mexico
as well as the de-facto moratorium in the Arctic. We have his 2012 budget that
proposes to eliminate several vital oil and natural gas production tax
incentives. We have his anti-drilling regulatory policies that have stymied
responsible development. And the list goes on. The President says that we can't
"drill" our way out of the problem. But we can't drive our cars on solar
shingles either. We have to live in the real world where we must continue to
develop the conventional resources that we actually use right now to fuel our
economy as we continue to look for a renewable source of energy. If we are
looking for an affordable, environmentally friendly, and abundant domestic
source of energy, why not turn to our own domestic supply of natural
gas? [Facebook.com, 3/30/11]
Hoft:
Obama Continues A “War On Domestic Production” With His “Ridiculous Energy
Plans.”
Linking to Palin's Facebook page, conservative blogger Jim Hoft wrote: "While the president trots out another energy
proposal, at the same time he continues his war on domestic production. … What's really
sad is how the lapdog media eats up his ridiculous energy plans that
will continue to devastate this nation's economy." [Gateway Pundit, 3/30/11]
Palin:
“The White House … [Is]
Allowing America To Remain Increasingly Dependent On Imports From Foreign
Regimes In Dangerously Unstable Parts Of The World.” Palin made similar
comments in a March 15 post on Facebook:
Is it really any surprise that oil and gas
prices are surging toward the record highs we saw in 2008 just prior to the
economic collapse? Despite the President’s strange assertions in his press
conference last week, his Administration is not a passive observer to the
trends that have inflated oil prices to dangerous levels. His war on domestic
oil and gas exploration and production has caused us pain at the pump,
endangered our already sluggish economic recovery, and threatened our national
security.
[...]
Taken altogether, it’s hard to deny that the
Obama Administration is anti-drilling. The President may try to suggest that
the rise in oil prices has nothing to do with him, but the American people
won’t be fooled. Before we saw any protests in the Middle East, increased
global demand led to a significant rise in oil prices; but the White House
stood idly by watching the prices go up and allowing America to remain
increasingly dependent on imports from foreign regimes in dangerously unstable
parts of the world. [Facebook.com, 3/15/11]
But
Experts Say It’s “Not Credible” To Blame Obama For Spike In Gas Prices
Former
Mobile Exec Gheit: Gulf Moratorium Had “Zero” Impact On Gas Prices. FactCheck.org
examined several claims regarding the Obama administration’s energy policies,
including the claim that Obama’s policies have increased gas prices, and
found:
So, why have gasoline prices gone up and what
impact have Obama’s policies had on oil production and gasoline prices?
We talked to Fadel Gheit, a former Mobil
Oil executive who is now a senior energy analyst at Oppenheimer & Co. Asked
about the impact of the deepwater moratorium, Gheit said the moratorium had a
"negative impact on production, but not as much as the politicians would
like us to believe." The impact of the moratorium on gas prices? "Nothing. Zero," he said.
[...]
It's important to note that even before the
oil spill and the moratorium, the EIA [Energy
Information Administration] projected in April 2010 that
oil production in the Gulf would decline this year. Before the spill, the EIA
expected the Gulf to produce 110,000 less barrels per day in 2011. As we said,
it is now expected to decline by 240,000 barrels a day this year. The
difference is 130,000 barrels per day.
But domestic production elsewhere will
partially offset the decline in the Gulf. EIA estimates that the net
result will be a decrease of about 110,000 barrels per day — which amounts to
six-tenths of 1 percent of the total 19.30 million barrels per day that the
U.S. is expected to consume this year. Gheit said such a relatively small
decline "doesn't even move the needle" on gas prices. He blamed
global events — not the president's policies — for rising gas
prices.
Gheit, March 17: Only the naive
will think that will have a direct impact. It doesn't even move the needle. Is
100,000 barrels (a day) going to make a difference? It's not. A cent or two per
gallon? It might. But there are much bigger factors. It is like a perfect
storm.
The "perfect storm," he said,
includes a series of refinery accidents, including an April 2, 2010,
blast in Washington state that killed seven people; a
labor strike in October 2010 that caused disruptions and closings of
oil refineries in France; "operating problems" at refineries in
Venezuela, Mexico and South America; and an increase in demand for
oil because of the improving economy. Of course, there is the unrest in the
Mideast — which has pushed oil prices above $100 per barrel.
“All in all, oil prices have been on the
rise in the last six months — before the Middle East. It has been moving for
more than a year now. Oil prices are inflated and will remain inflated for
factors other than supply and demand,” Gheit said. [FactCheck.org, 3/24/11]
Chris
Lafakis: “Absolutely No Merit To This Viewpoint Whatsoever.” Chris Lafakis, economist at Moody’s Analytics
and expert in energy markets, told Media
Matters via email:
I received your question about whether or not
federal drilling policies are responsible for the current rise in gas prices.
There is absolutely no merit to this viewpoint whatsoever. Near-term
fluctuations in gasoline prices are determined by two primary factors: crude
oil prices and seasonality. Since the deepwater drilling delay applies only to
exploration and production, it would take years, maybe a decade to get any
amount of crude oil out of the ground and into our gas tanks. In the meantime,
global crude oil supply is exactly the same as it would have been if the
government were giving away permits like candy.
Currently, crude oil prices have jumped $15
since the civil war broke out in Libya. This rise in crude oil prices underpins
all of the recent increase in gasoline prices. [Email to Media Matters,
3/14/11]
Michael
Canes: “Not Credible To Blame The Obama Administration’s Drilling Policies
For Today’s High Prices.” While noting that he
disagrees with the Obama administration's policies on oil and gas drilling,
Michael Canes, research fellow at the Logistics Management Institute and former
chief economist of the American Petroleum Institute, told Media
Matters via email that it is “not credible” to blame Obama’s
policies for the high gas prices:
It's not credible to blame the Obama
Administration's drilling policies for today's high prices because of the
relative scales involved. As I indicated the last time, world oil prices
are determined in a market of around 85 million barrels per day of production
and consumption, while the consequences of domestic drilling, particularly in
the Gulf, likely would be more in the range of several hundred thousand to one
million barrels per day, and most of that production would not occur for a
number of years. [Email to Media Matters, 3/10/11]
Lou
Crandall: "Gasoline Prices At The Pump Would Be Higher" Even If U.S.
Had Increased Drilling. Lou Crandall, chief economist of Wrightson
ICAP LLC, an independent research firm that analyzes high-frequency economic
data, told Media Matters via email:
Higher oil prices today are a global
phenomenon, and the additional supply from increased drilling by the U.S. would
not alter the global balance of supply and demand greatly. Gasoline
prices at the pump would be higher either way. The only difference is
that a somewhat larger share of the revenue would accrue to domestic interests
(governmental and private) rather than to foreign suppliers. [Email to Media
Matters, 3/14/11]
Wally
Tyner: High Gas Prices Are A Result Of World Demand, Unrest In Libya — Not
Obama's Drilling Policies. When asked if there is "any merit to the
claim that Obama's drilling policies caused the high gas prices we're
seeing," Wally Tyner, energy economist at Purdue University, said:
"No. It would take years for increased drilling to have an impact.
And most of the oil that remains off the US shores is in deep water and
high cost." Tyner added:
The biggest factor is the rapid growth in
world demand, especially India and China. Over the past decade, about a
third of the global growth in world demand has come from China alone.
Currently with most of the exports from Libya
down, that is causing prices to be higher. However, Saudi Arabia has indicated
they will pick up the slack, but that will take a while to work through the
system. Saudi oil is sour crude, and Libya produces sweet crude mostly
destined for European refineries that cannot generally take sour crude. [Email
to Media Matters, 3/14/11]
Tom
O'Donnell: "The Amount Of Extra Oil That The U.S. Would Produce"
Would Have "Almost Insignificant" Effect On Prices. Tom O’Donnell,
professor of Graduate International Affairs at The New School and expert on the
globalized energy sector, said blaming the high gas prices on the
administration’s drilling policy mistakes correlation for causation. O’Donnell
further stated:
Even if you gave permission to drill, it
might take generally about seven years for oil to get to market. So that has
absolutely no effect on the price of oil today. None whatsoever. The amount of
extra oil that the U.S. would produce, as far as affecting the world price of
oil, is almost insignificant.
People who say producing more oil will bring
price down for Americans are missing the fact that it's a world market. For
instance, oil produced in North Slope may very well go to Japan. There's not a
separate market — It's a world market. [Phone conversation with Media
Matters, 3/14/11]
Total
Oil Imports From “Dangerous Or Unstable” Countries Have Decreased Since Obama
Took Office
FactCheck.org:
“[H]as Obama Allowed Us To Become ‘Increasingly Dependent’ [On Foreign Oil]?
No.”
In its March 24 post, FactCheck wrote:
Also on imports, Palin claimed in that same March 15 Facebook post that
the administration’s inaction on drilling permits is “allowing America to
remain increasingly dependent on imports from foreign regimes in dangerously
unstable parts of the world.”
There is no question that the U.S. for a long
time has relied on importing oil from dangerously unstable parts of the world.
But has Obama allowed us to become “increasingly dependent”? No.
First of all, net imports are trending
downward. Our reliance on imported liquid fuels — as the EIA calls oil and
other petroleum products — declined to less than 50 percent of U.S.
consumption in 2010. And, despite an expected uptick this and next year, it
will decline through 2035. The EIA's 2011 Annual Energy Outlook, released
December 2010, projects our reliance on imported liquid fuels will drop to 42
percent by 2035.
[...]
Now, Palin did not specify which countries
she meant when she wrote about "foreign regimes in dangerously unstable
parts of the world." The Middle East and Africa are unquestionably two
"dangerously unstable parts of the world," so let's look at U.S.
imports from those regions last year compared with 2008, President George W.
Bush's last year in office. (To do so, we looked at EIA data for U.S.
imports – using the 2008 "annual-thousand barrels per day"
figures and calculating a comparable figure using the 2010 monthly import
data.)
[...]
[I]n order to properly judge whether we are
“increasingly dependent” on imports from countries in these two
regions, we have to look at the imports from the Middle East and Africa as a
share of total U.S. imports. In that case, oil from African countries
represented 14 percent of total U.S. imports in 2010 — about the same as it did
in 2008. The share of oil from the Middle East, however, declined from 24
percent of U.S. imports in 2008 to 20 percent in 2010.
Overall, the two regions accounted for 37
percent of our imported oil in 2008 and 33 percent of our imported oil in 2010. So by this measure,
Palin was wrong to say Obama was making the country “increasingly
dependent on imports from foreign regimes in dangerously unstable parts of the
world.”
Perhaps another way to judge our reliance on
troubled countries is to look at the State Department's list of "dangerous
or unstable nations," which recommends that Americans "avoid or
consider the risk of travel to that country." This isn't the best method,
because some countries do not have unstable governments but can be dangerous to
tourists in some areas. Japan, for example, is on the list of "dangerous
or unstable countries," because of the recent earthquake and tsunami and
subsequent damage to nuclear reactors.
Nevertheless, there were 34 countries listed
when we checked on March 18, and the U.S. imported oil products from half of
them in the last three years — including Mexico and Saudi Arabia, two of our
major suppliers, according to EIA figures.
The U.S. imported about 5.4 million barrels
of petroleum and other liquids per day from those 17 nations in 2008. That
was about 42 percent of the 12.91 million barrels per day that
the U.S. imported that year. And the U.S. imported about 4.8 million barrels of
petroleum per day from those same countries in 2010, or 41 percent of
the 11.75 million barrels of petroleum it imported each day last
year.
So, going by the countries that the State
Department considers to be “dangerous or unstable,” Palin would be
wrong when looking at total imports since Obama became president. Individually,
however, imports were up from some nations and down from others.
[...]
The U.S. actually imports more petroleum from
our northern neighbor, Canada, than it does from any other country. And Canada
does not appear on the State Department’s list of “dangerous or unstable
nations.” Nor do Venezuela, Russia, Angola, Brazil, the United Kingdom,
Ecuador, the Virgin Islands or Kuwait, which are all in the top 15 countries
from which the U.S. imports oil and other petroleum products. [FactCheck.org, 3/24/11,
emphasis added]
Contrary
To Right-Wing Media Claims, More Offshore
Drilling Would Not Substantially Lower Prices At the Pump
PolitiFact:
Experts Agree That Expanding Offshore Drilling “Would Have Little Effect
At The Pump Any Time Soon.” On December 1, 2010, PolitiFact evaluated
Rep. Debbie Wasserman Schultz’s (D-FL) statement that a “5 percent
increase in domestic production would increase the world supply by less than 1
percent and do almost nothing to our dependence on foreign oil. This would also
have virtually no effect on the price of gas at the pump.” PolitiFact rated Wasserman Schultz’s claim
“true,” saying that experts agreed that such drilling would not have
much effect on gas prices in the near future:
The political momentum for offshore drilling
has always risen and fallen along with gas prices. But while there are strong
arguments that can be made in favor of offshore drilling, reducing the cost of
gas “here and now” isn’t one of them, according to oil experts and
economists — many of whom support the plan.
For starters, the lead time for oil
exploration takes years. Even if offshore drilling areas opened up tomorrow,
experts say it would take at least 10 years to realize any significant
production. And even then, they say, the U.S. contribution to the overall
global oil market would not be enough to make a significant dent in the price
of gas.
“Drilling offshore to lower oil prices
is like walking an extra 20 feet per day to lose weight,” said David
Sandalow, a senior fellow at the Brookings Institution, and author of Freedom
from Oil. “It’s just not going to make much difference.”
[...]
We ran Wasserman Schultz’s claim by Jamie
Webster, a senior consultant with PFC Energy, which tracks oil production and
demand globally and whose clients are governments, including the United
States., and oil and gas companies. We also heard from Daniel J. Weiss, who has
written extensively about oil prices and policy and is a senior fellow and
director of climate strategy at the Center for American Progress, which
describes itself as a progressive think tank. Both Webster and Weiss agreed
with Wasserman Schultz.
[...]
Let’s review: Wasserman Schultz’s math adds
up — Gulf drilling does indeed represent about 5 percent of current domestic
production, and a 5 percent increase would barely register in terms of the
world supply. And the experts we found for this Truth-O-Meter as well as ones
cited in the past about McCain’s claim agree that expanding drilling now would
have little effect at the pump any time soon. We rate this claim True. [PolitiFact.com, 12/1/10]
Bush
Administration Energy Department: Additional Offshore Drilling “Would Not
Have A Significant Impact” On Crude Oil Prices Before 2030. Earlier, in 2007,
when President Bush was in office, the Energy Information Administration said:
The projections in the OCS access case
indicate that access to the Pacific, Atlantic, and eastern Gulf regions would
not have a significant impact on domestic crude oil and natural gas production
or prices before 2030. Leasing would begin no sooner than 2012, and production
would not be expected to start before 2017. Total domestic production of crude
oil from 2012 through 2030 in the OCS access case is projected to be 1.6
percent higher than in the reference case, and 3 percent higher in 2030 alone,
at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil
production in 2030 is projected to be 7 percent higher–2.4 million barrels per
day in the OCS access case compared with 2.2 million barrels per day in the
reference case (Figure 20). Because oil prices are determined on the
international market, however, any impact on average wellhead prices is
expected to be insignificant. [U.S. Department of Energy, accessed 3/31/11]
