On Fox News, Eric Bolling advanced several energy myths that have been debunked by experts, including the claim that the U.S. could end its dependence on foreign oil by expanding domestic drilling.
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Bolling Claims U.S. Can Reach Energy Independence Through Domestic Drilling
From the March 29 edition of Fox News' America Live:
ERIC BOLLING: The bottom line is there's plenty of oil. We just need to be able to get it, access it here. We've got more oil than Brazil. We've got more oil than Saudi Arabia. How about an energy policy that isn't blocking, hindering, and obstructing our own drilling companies?
BOLLING: We have hundreds of billions of barrels equivalent sitting right here in America, we just have to permit it.
MEGYN KELLY (host): If you can get the permit. Now, let me ask you this because, you know, the president in defending that thing with Brazil said, look, even if we started drilling everything -- he didn't say this, but defenders would argue - even if we started drilling in all those places tomorrow, it's going to take us a few years, right?
KELLY: So Brazil, why not import from Brazil as opposed to one of these Middle Eastern countries that may not be our friend, you know, in full and Brazil we can rely on. So what's wrong with both tapping into Brazil oil and our own?
BOLLING: Because we need our own. We don't need Brazil, we don't need Saudi Arabia, we don't need Chavez in Venezuela. We need our own. [Fox News, America Live, 3/29/11]
Experts Reject Notion That U.S. Can Eliminate Oil Imports By Drilling
Tom O'Donnell: "It Is Impossible For The U.S. To Ever Again Achieve Energy Independence From Oil Imports By Producing More Oil At Home." Tom O'Donnell, professor of Graduate International Affairs at The New School and expert on the globalized energy sector responded to Bolling's claim by stating "It is not possible given the level of US proven reserves, for the US to become 'energy independent' (in terms of oil)." Further, O'Donnell explained:
Mr. Bolling asserts: "We have hundreds of billions of barrels equivalent sitting right here in America, we just have to permit it."
However, one should be careful with numbers. Speaking of the U.S. in terms of "100's" of billions of barrels of reserves is a gross overstatement of what we have available here in the U.S. yet to be pumped out of the ground.
Here are the actual numbers:
According to the U.S. Energy Information Agency at the DoE, the entire world, in 2009, had 1,354 billion barrels of proven reserves of oil.
Meanwhile, the U.S., including offshore and Alaska, has only 19.1 billion barrels. (In 2010, this number didn't change significantly.)
This means that the US has only 1.4% of all the world's proven oil reserves.
The numbers I cited include all the reserves Mr. Bolling would like to begin pumping in order to somehow make the U.S. independent of imports. However, Alaska's entire reserves are only 3.6 billon barrels, and the entire Gulf Coast offshore has 4.0 billion barrels. There simply are no "100's of billions of barrels" of untapped reserves in the U.S.
It is impossible for the U.S. to ever again achieve energy independence from oil imports by producing more oil at home. We, like all other industrialized countries today, must rely on a well functioning world oil market.
As for consumption, the world consumed on average 84.4 million barrels of oil per day in 2009, of which the US consumed 18.8. million barrels, or a remarkable 22% of all the world's oil.
There is simply no way that a country that consumes 22% of all the world's oil but has only 1.4% of the world's proven oil reserves can pump that much more extensively or more rapidly on those reserves to become independent of all imports. [Email to Media Matters, 3/30/11]
Chris Nelder: Could We Achieve "True 'Energy Independence'"? "Through Drilling Alone, The Answer Is 'Not Even Close.' " According to energy analyst Chris Nelder:
True "energy independence" would mean producing 18 to 20 mbpd, not the roughly 5.5 mbpd we are producing today. Could we do that?
Through drilling alone, the answer is "not even close." In total, I estimate that if all limits on drilling were removed, including the OCS and ANWR, we could only increase US oil production by a maximum of 2-3 mbpd. That new production would come online slowly, and the additional flow would be hardly noticeable as it compensated for the loss in conventional oil production due to sheer depletion. If it lowered prices at all, it would be by a few pennies per gallon, at best. [Energy & Capital, 4/29/09]
Amy Jaffe: Even If The U.S. Opened "All Areas For Drilling, We Would Still Have A Hard Time Eliminating 100 Percent Of All Need For Imports." In an email to Media Matters, Amy Jaffe, Rice University fellow in Energy Studies and director of the Energy Forum at the James A. Baker Institute responded to Bolling's claim that we wouldn't need to import oil if we expanded drilling in the U.S.:
No, chances are, were the US to open up all areas for drilling, we would still have a hard time eliminating 100 percent of all need for imports of 12 to 14 million b/d. We would have to be willing to drill a huge amount and all around the country and then we might be able to eliminate most of our imports. [Email to Media Matters, 3/30/11]
EIA: U.S. Will Still Import 41% Of Oil By 2030 Even If We Opened Vast New Areas To Drilling. The U.S. Energy Information Administration has estimated that even if the Pacific and Atlantic coasts and the eastern Gulf of Mexico were all opened up to drilling, the U.S. would still be importing 41 percent of the oil we use in 2030. [EIA.doe.gov, March 2009]
Bolling Blames High Gas Prices On Lack Of Domestic Production
Bolling Cites Declining Domestic Production As Reason "Why Our Prices Are $3.59 At the Pump Now." From America Live:
KELLY: He came out a couple of weeks ago and offered remarks on this and went on the offensive, saying those kinds of criticisms don't match with reality, Eric. And what he said was that our oil production has reached the highest level ever in the Gulf of Mexico. The highest level ever, he says.
BOLLING: Wrong. Wrong. He's wrong. He either lied or he's been misinformed because Steven Chu, his energy czar, can't get his own act together and figure this out. Our domestic oil production is on the decline. Go to EIA.gov, it's the Department of Energy's website. It will tell you, onshore drilling, field drilling has gone from almost 10 million barrels a day to about 5 and a half million barrels a day. Offshore isn't spiking. Our domestic oil production is on the way down, while our demand for oil is on the way up. That's why our prices are $3.59 at the pump now. And when Obama took office, $1.83, 96% higher. [Fox News, America Live, 3/29/11]
Industry Experts Agree: Expanding Domestic Production Won't Solve High Gas Prices
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]
O'Donnell: "The Amount Of Extra Oil That The U.S. Would Produce" Would Have "Almost Insignificant" Effect On Prices. O'Donnell 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]
AEI Scholar: "We Probably Couldn't Produce Enough To Affect The World Price Of Oil." According to a Greenwire article published by the New York Times:
If gas prices keep increasing, Republicans probably will make a push on increased fossil fuel production, said Ken Green, resident scholar with the American Enterprise Institute think tank.
But experts disagreed about how much impact additional drilling could have. Crude oil is a global commodity, Green said.
"The world price is the world price," Green said. "Even if we were producing 100 percent of our oil," he said, if prices increase because of a shortage in China or India, "our price would go up to the same thing.
"We probably couldn't produce enough to affect the world price of oil," Green added. "People don't understand that."
U.S. production could be negated by decisions that the Organization of Petroleum Exporting Countries makes, said Philip Verleger Jr., energy economist, and David Mitchell EnCana, professor of management, at the University of Calgary's business school.
"Suppose the U.S. were to boost production 1 million barrels a day," Verleger said. "OPEC has the capacity to cut 1 million barrels."
The oil industry has been able to convince people there is a connection between U.S. drilling and prices, Verleger said. [Greenwire via NYTimes.com, 1/4/11]
PolitiFact: Experts Agree That Expanding Offshore Drilling "Would Have Little Effect At The Pump Any Time Soon." From PolitiFact's evaluation of 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.":
Background on drilling and gas prices
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., [sic] 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, emphasis original]
DOE In 2009: Reinstating Offshore Drilling Ban Would Increase Prices By Merely 3 Cents Per Gallon. From the Department of Energy's 2009 Annual Energy Outlook:
The U.S. offshore is estimated to contain substantial resources of both crude oil and natural gas, but until recently some of the areas of the lower 48 OCS have been under leasing moratoria . The Presidential ban on offshore drilling in portions of the lower 48 OCS was lifted in July 2008, and the Congressional ban was allowed to expire in September 2008, removing regulatory obstacles to development of the Atlantic and Pacific OCS [57, 58].
To examine the potential impacts of reinstating the moratoria, an OCS limited case was developed for AEO2009. It is based on the AEO2009 reference case but assumes that access to the Atlantic, Pacific, and Eastern/Central Gulf of Mexico OCS will be limited again by reinstatement of the moratoria as they existed before July 2008. In the OCS limited case, technically recoverable resources in the OCS total 75 billion barrels of oil and 380 trillion cubic feet of natural gas.
The projections in the OCS limited case indicate that reinstatement of the moratoria would decrease domestic production of both oil and natural gas and increase their prices (Table 9). The impact on domestic crude oil production starts just before 2020 and increases through 2030. Cumulatively, domestic crude oil production from 2010 to 2030 is 4.2 percent lower in the OCS limited case than in the reference case. In 2030, lower 48 offshore crude oil production in the OCS limited case (2.2 million barrels per day) is 20.6 percent lower than in the reference case (2.7 million barrels per day), and total domestic crude oil production, at 6.8 million barrels per day, is 7.4 percent lower than in the reference case (Figure 13). In 2007, domestic crude oil production totaled 5.1 million barrels per day.
With limited access to the lower 48 OCS, U.S. dependence on imports increases, and there is a small increase in world oil prices. Oil import dependence in 2030 is 43.4 percent in the OCS limited case, as compared with 40.9 percent in the reference case, and the total annual cost of imported liquid fuels in 2030 is $403.4 billion, 7.1 percent higher than the projection of $376.6 billion in the reference case. The average price of imported low-sulfur crude oil in 2030 (in 2007 dollars) is $1.34 per barrel higher, and the average U.S. price of motor gasoline price is 3 cents per gallon higher, than in the reference case. [U.S. Department of Energy, Energy Information Administration, accessed 3/7/11]
Bush Administration Energy Department: Additional Offshore Drilling "Would Not Have A Significant Impact" On Crude Oil Prices Before 2030. According to a 2007 report by the U.S. Energy Information Administration:
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, Energy Information Administration, accessed 3/7/11]
EIA Analyst: Total Offshore Production Would Amount To "Less Than 1 Percent Of The Total Projected International Consumption" In 2030. From a September 2008 Scientific American article:
So are promises of U.S. oil independence real--or rhetoric? The issue is not whether the U.S. can significantly reduce its reliance on oil imports with domestic, offshore oil, say both [oil expert Robert] Kaufman and [energy researcher Ian] Nathan, but whether there is enough that is recoverable to significantly lower the price of a barrel of oil on the global market.
Even by 2030, offshore drilling would not have a significant impact on oil prices, according to [EIA analyst Phyllis] Martin, because oil prices are determined on the global market. "The amount of total production anticipated--around 200,000 barrels a day--would be less than 1 percent of the total projected international consumption."
And disruptions to the global supply affect the price of every barrel of oil the U.S. purchases, whether it be from Saudi Arabia, Venezuela or off the New Jersey coast. "Suppose the U.S. got all its oil domestically, and the price was $100 a barrel. Then the Saudi family was deposed," disrupting that country's oil exports, Kaufman says. "The Saudis produce about 10 million barrels a day of the world's 85 million, so clearly prices would go up, because now there is this big shortfall of oil."
"Do you think oil companies are going to sell [U.S. oil] to U.S. consumers for anything less than top price?," he asks. "The answer is no." [Scientific American, 9/12/08]
Newsweek: Oil Prices "Determined By Global Supply And Global Demand." From a March 31, 2010, Newsweek commentary by Ben Adler:
Oil, you see, is a fungible global commodity. The oil that one drills for in Texas powers a car the same way that oil from Kuwait does. So the price that Texans pay for oil is determined by global supply and global demand, not how much oil is drilled on the Gulf Coast.
In a market economy such as ours, opening an area for drilling does not mean that the U.S. government controls its destination. Shell and Chevron will be perfectly happy to sell their oil to China if Chinese drivers are willing to pay more than Americans. The U.S. could produce exactly as much gasoline as it consumes and it would still feel the effects of, say, a decision by Hugo Chávez or Vladimir Putin to stop selling any oil. If global supply drops precipitously, global prices will rise, and unless we plan on nationalizing the oil industry--a move I doubt either Democrats or Republicans will endorse--the fact that we are drilling for more oil near our shores won't protect us from the price shock. [Newsweek, 3/31/10]
Bolling Pushes "Bogus" Claim That Obama Is Responsible For Ex-Im Loan To Brazil
Bolling Claims Export-Import Loan To Brazil Shows Obama Favors Foreign Drillers. From America Live:
BOLLING: Here's a very good example of the difference between the way the Obama administration treats our domestic drilling with foreign drillers. He's offered -- the import/export, the export-import bank, I'm sorry, has a $2 billion loan outstanding, available, already approved, waiting for Petrobras -- Brazil - to tap. That's our money we're going to loan them to drill. Meanwhile people, these oil companies are jumping through hoops trying to get a permit to drill here. Can you imagine if he gave us $2 billion to drill? Prices would start to come down. [Fox News, America Live, 3/29/11]
FactCheck.org: Claim That Obama Ordered Loan Is "Bogus." From a FactCheck.org article titled "Bogus Brazilian Oil Claims" which debunked the claim that President Obama loaned "$2 billion to Brazil's oil company to benefit China and George Soros":
This claim stems from a "preliminary committment" made back on April 14 by the board of directors of the Export-Import Bank of the United States. The bank intends to loan up to $2 billion to finance exports to the Brazilian oil company Petróleo Brasileiro S.A., known as Petrobras, over the next several years.
The e-mail is false on two counts.
- The message falsely says the decision was due to an "executive order" by the president. No presidential order was required. Furthermore, none of President Obama's appointees had joined the Ex-Im board at the time of the vote, which was unanimous, and bipartisan. The Ex-Im Bank states: "In fact, at the time the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush."
- The message falsely claims that "we have absolutely no gain" from the loan. In fact, the loan is being made specifically to finance purchase by Petrobras of U.S.-made oilfield equipment and services. The mission of the Ex-Im Bank is to encourage exports by making such loans.[FactCheck.org, 9/18/09]
Ex-Im Bank: "Bipartisan Board Unanimously Approved The Preliminary Commitment To Petrobras ... Before Any Obama Appointees Joined The Bank." According to a fact sheet issued by the Export-Import Bank of the United States:
Charge: The loan to Petrobras represents a reversal of the Obama Administration's policies on off-shore drilling.
Fact: The Bank's bipartisan Board unanimously approved the preliminary commitment to Petrobras on April 14, 2009, before any Obama appointees joined the Bank. In fact, at the time the Bank's Board consisted of three Republicans and two Democrats, all of whom were appointed by George W. Bush. [U.S. Export-Import Bank, accessed 3/30/11]
Forbes Contributor: "The President Of The United States Does Not Decide Who Gets Export-Import Bank Loans." In a blog post on Forbes reporting on the renewed controversy regarding the Export-Import Bank loan to Petrobras, former Dow Jones reporter Kenneth Rapoza wrote:
When Obama went to Brazil the weekend of March 19-20, the "Obama loan" resurfaced in the online news narrative. Soros profited! It was borderline insider trading! Why are we funding offshore drillers in Brazil, but not in the US? It makes no sense.
With a nod to Jerry Seinfeld..."ladies and gentlemen, I implore you."
Obama had nothing to do with the loan, or non-loan, because no money has changed hands. The President of the United States does not decide who gets Export Import Bank loans. The president's role is to appoint board members who are confirmed by the Senate. The board members decide. [Forbes, 3/21/11]