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]