During a discussion of gasoline prices, frequent Fox News guest Brent Bozell claimed that U.S. oil production has fallen under President Obama. In reality, the opposite is true: after increasing every year since 2009, oil production is at an eight-year high; gas prices continue to rise because they are determined by a world market, not by U.S. production.
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Bozell Falsely Claims Oil Production Has Fallen Under Obama
Bozell: "Oil Production In This Country Was 10 Million Barrels A Day When He Took Office. It's Down To 7 Million Barrels A Day." From a discussion of gasoline prices on Hannity:
BRENT BOZELL, MEDIA RESEARCH CENTER: This president will say that he's allowing drilling, but he just won't give permits. Get this. Consider that oil production in this country was 10 million barrels a day when he took office. It's down to 7 million barrels a day, and here the president is giving a speech today blaming Republicans for this. I mean, this should be an issue. He needs to be called out on this. [Fox News, Hannity, 2/23/12]
Reality: Oil Production Is At An Eight-Year High
Energy Information Administration: U.S. "Oil Production Has Increased Over The Past Few Years, Reversing A Decline That Began In 1986." From the 2012 Annual Energy Outlook by the Energy Information Administration:
Domestic crude oil production has increased over the past few years, reversing a decline that began in 1986. U.S. crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. [Energy Information Administration, 1/23/12]
PolitiFact: Oil Production Is Highest In Eight Years. From a January 24 PolitiFact article:
Here are the annual totals, in barrels produced, going back to 2003:
The full-year data is available only through 2010, but 10 months of data from 2011 have been made public. Through the end of October 2011, production totaled 1,713,038,000 barrels. If that pace continues, the year-end total should be around 2,055,646,000 barrels -- higher than any year since 2003. That's eight years ago, just as Obama said. [PolitiFact.com, 1/24/12]
EIA: U.S. Has Not Produced 10 Million Barrels Of Oil A Day Since 1970. From the EIA table of crude-oil production:
[EIA.gov, accessed 2/23/12]
Bozell Falsely Claims Obama Won't Issue Drilling Permits
Bozell: Obama "Will Say That He's Allowing Drilling, But He Just Won't Give Permits." From Hannity:
BOZELL: This president will say that he's allowing drilling, but he just won't give permits. Get this. Consider that oil production in this country was 10 million barrels a day when he took office. It's down to 7 million barrels a day, and here the president is giving a speech today blaming Republicans for this. I mean, this should be an issue. He needs to be called out on this. [Fox News, Hannity, 2/23/12]
Reality: Nearly 500 Permits Have Been Issued For Offshore Drilling In Gulf Of Mexico Alone
Department Of Interior: Since June 2010, 111 New Shallow Water Permits Have Been Issued For Gulf. From the website of the Interior Department's Bureau of Safety and Environmental Enforcement:
To date, 111 new shallow water well permits have been issued since the implementation of new safety and environmental standards on June 8, 2010. Just 7 of these permits are currently pending; with 12 having been returned to the operator for more information. [BSEE.gov, accessed 2/24/12]
Department Of Interior: Since October 2010, 362 Deepwater Permits Have Been Issued For Gulf. From the Bureau of Safety and Environmental Enforcement website:
Deepwater drilling applications fall into two categories for the implementation of our new regulations. To clarify these differences, we have included the narrative below. The deepwater moratorium was lifted on October 12, 2010, and is the reference for inclusion of new rules in applications:
- Deepwater permits requiring subsea containment: Since an applicant first successfully demonstrated containment capabilities in mid-February 2011, we have approved 302 of these permits for 92 unique wells, with 33 permits pending, and 16 permits returned to the operator with requests for additional information, particularly information regarding containment.
- Deepwater activities not requiring subsea containment: Since the implementation of new safety and environmental standards, 60 of these permits have been approved, with 4 permits pending, and 0 permits returned to the operator with requests for additional information. These activities include water injection wells and procedures using surface blowout preventers. [BSEE.gov, accessed 2/24/12]
Reality: Increased Oil Drilling Won't Hold Down Gas Prices
EIA Director: Expanding Drilling In Federal Areas Is Not Expected To Have A Large Impact On Prices. From the March 2011 Congressional testimony of Richard Newell, Administrator of the Energy Information Administration:
In the short-term, oil markets react to many competing factors in a global context, and it is extremely difficult to disentangle the near-term impact of mid-to-long-term developments in the context of oil markets that see typical daily price movements in the range of 1-2 percent, and much higher fluctuations at times. Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements. Given the increasing importance of OPEC supply in the global oil supply-demand balance, another key issue is how OPEC production would respond to any increase in non-OPEC supply, potentially offsetting any direct price effect.[Energy Information Administration, 3/17/11, emphasis added]
Even The American Petroleum Institute Doesn't Claim That Opening All Federal Areas To Drilling Would Lower Prices. CNNMoney.com reported:
[American Petroleum Institute's Rayola] Dougher said that if all federal land was open to oil drilling -- not just offshore but Alaska's wildlife refuge and all federal land in the West that isn't a national park -- the country could produce an extra 2.8 million barrels of oil a day by 2025.
Being that she represents the oil industry, Dougher gave the idea a hard sell.
She said it would create another 500,000 jobs, add $150 billion each year to government coffers and shave a significant chunk off the country's foreign trade deficit.
But one argument she didn't make was lower prices.
"How would that play out in the market, what impact would that have on prices," she said, "we just don't know." [CNNMoney.com, 4/25/11]
Former Bush Economic Advisor: "You Can't Change The Oil Price Very Much With The U.S. Exploration." On the April 26, 2011 edition of MSNBC's Hardball with Chris Matthews, Doug Holtz-Eakin, who served on George W. Bush's Council of Economic Advisors said, "you can`t change the oil price very much with the U.S. exploration":
MATTHEWS: Well, let me ask you this. If we were raping this continent, if we were drilling offshore everywhere, deep drilling, risking everything -- just like we did, down in -- with BP, if we were taking apart the ANWR and drilling everywhere, would the price of gas be much different? In the world market, since this all fungible, if we were doing all that here in the United States, would the price of gas be much different? I`m just asking that question.
HOLTZ-EAKIN: No, he can`t change the price very much. So, I mean, he`s trying to do things --
MATTHEWS: But the conservatives are saying all you have to do is pump like -- all you got to do is drill like -- Pawlenty said, just got at this, dig, dig, and dig, drill, drill, and drill, and somehow the price of the gas is going to down on the world market. You`re saying that`s not true?
HOLTZ-EAKIN: Well, I mean, you can`t change the oil price very much with the U.S. exploration. It certainly can`t change it quickly. We know that. And I think Republicans have been honest about that.
You also aren`t going to change the price of gasoline attacking oil companies. You know, the president is saying, oh, we got to get rid of $4 billion subsidies. That`s 3 cents a gallon, OK? That`s not a solution.
MATTHEWS: Would you get rid of them?
HOLTZ-EAKIN: Yes, but it`s not going to change gas prices that way. [MSNBC, Hardball,4/26/11, accessed via Nexis]
Energy Analyst: "Americans Tend To Exaggerate The Price Effects Of Fluctuations In Domestic Production." Joseph Dukert, independent energy analyst and former president of the U.S. Association for Energy Economics said via email that "Americans tend to exaggerate the price effects of fluctuations in domestic production in relation to the total amount of oil in global trade. On the larger stage, the perception of geopolitical risks is more important." [Email to Media Matters, 4/21/11]
Oil Expert: "The Oil Industry Has Been Able To Convince People There Is A Connection Between U.S. Drilling And Prices." From a January 2011 Greenwire article:
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]
Oil Analyst: "Drill Drill Drill Thing" Is "A Simplistic Way Of Looking For A Solution That Doesn't Exist." From an April 2011 CNNMoney article:
The problem is this: While increased oil and gas drilling in the United States may create good-paying jobs, reduce reliance on foreign oil and lower the trade deficit, it will have hardly any impact on gas and oil prices.
That's because the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the world consumes.
Plus, any extra oil the country did produce would likely be quickly offset by a cut in OPEC production.
"This drill drill drill thing is tired," said Tom Kloza, chief oil analyst at the Oil Price Information Service, which calculates gas prices for the motorist organization AAA. "It's a simplistic way of looking for a solution that doesn't exist." [CNNMoney.com, 4/25/11]