Energy Experts Reject Claim That U.S. Drilling Policies Caused Recent Jump In Gas Prices

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]

News Media Churn Out He Said/She Said Coverage Of Claims That Obama Caused Gas Price Spike

New York Times. From a March 11 New York Times article titled, “Energy Policy Defended as Gasoline Prices Rise”:

With rising gasoline prices fueling public pain, President Obama defended his energy policies on Friday against critics who claim he has pushed prices up by clamping down on domestic oil production.

The president sought to reassure the public that global oil supplies were adequate to weather the current political instability in the Middle East and ruled out an immediate release of oil from the nation's strategic petroleum stockpile.

[...]

As gas prices have climbed in recent weeks, Republicans in Congress and oil industry executives have grown increasingly vocal in their complaints about the drilling policy, saying that the Interior Department overreacted to the Deepwater Horizon explosion and subsequent oil spill by temporarily halting all new offshore drilling. [New York Times, 3/11/11]

Associated Press. From a March 11 Associated Press article titled, “GOP, Dems trade barbs as gas prices rise”:

With gas prices approaching $4 a gallon, Republicans and Democrats traded barbs Thursday over which party is to blame for pain at the pump.

House Speaker John Boehner and other Republicans said gas prices have doubled since President Barack Obama took office in 2009. Boehner said the Obama administration has “consistently blocked” efforts to increase domestic oil production and blasted what he called a de facto moratorium on deepwater drilling in the Gulf of Mexico.

At a news conference Thursday, Boehner and other top Republicans announced a push to expand domestic energy production. The GOP plan would open up oil drilling in Alaska and the Gulf, make it easier to build nuclear power plants and encourage vehicles to use natural gas.

“At a time when our economy is already in a position when it is not creating enough jobs, rising gas prices hurt the very people that we need to lead us out of our economic crisis, and that's small businesses,” Boehner said.

Rep. Ed Markey, D-Mass., called Boehner's comments off base and said unrest in Libya and other countries was to blame for higher gas prices. [Associated Press, 3/11/11]

Christian Science Monitor. From a March 11 Christian Science Monitor article:

President Obama is fighting back against efforts by Republicans to blame rising gasoline prices on the White House.

At a press conference on Friday, Mr. Obama said that during his administration US oil production has reached its highest level since 2003. Oil production from Gulf of Mexico waters controlled by the federal government now is at an all-time high, the president said. Last year, for the first time in a decade, imports accounted for less than half of US oil consumption.

“So any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn't match up with reality,” said Obama, reading from a prepared statement before taking questions.

[...]

In this context, administration officials perhaps thought it best to mount to a quick defense to charges House Speaker John Boehner (R) of Ohio made Thursday that Washington has been a part of the problem in terms of energy prices.

The White House has canceled new leases for oil exploration and imposed a de facto moratorium on future drilling in the US, said Speaker Boehner.

“The Obama administration has consistently blocked American energy production that would lower costs and create jobs in our country,” he said at a meeting with reporters. [Christian Science Monitor, 3/11/11]

Wall Street Journal. From a March 10 Wall Street Journal report:

Unrest in the Middle East and North Africa has driven up gasoline and heating oil prices in the United States. Republicans in Congress have raised the volume on their criticism of Mr. Obama's energy policies, and some Democrats have called for Mr. Obama to release oil from the strategic reserves in an attempt to moderate prices by increasing supply.

[...]

The White House is facing attacks from Republicans for not doing more to increase energy supply and, in their view, allowing gas prices to rise.

“The Obama administration has consistently blocked American energy production,” House Speaker John Boehner (R., Ohio) said at a news conference Thursday.

Mr. Carney replied that domestic oil production was higher last year than in any year since 2003. “This president is committed to responsible production of energy, including oil, in this country,” he said. [Wall Street Journal, 3/10/11]

National Public Radio. From a March 10 NPR report:

As pump prices rise, so does the chorus of criticism from Republicans, who accuse the Obama administration of deliberately curtailing U.S. oil production.

“What about domestic supply?” asked Sen. David Vitter (R-LA) this week. “What about the Gulf of Mexico? What about all of our other vast energy resources that we are taking off the table and shutting down?”

Rep. Doc Hastings (R-WA), who is chairman of the House Natural Resources Committee, has cataloged ways he says the administration has frustrated oil production, from suspended drilling leases to increased red tape. House Speaker John Boehner (R-OH) posted highlights of the list on his website.

“Since this administration has taken over, they have done everything to block energy development in this country,” Hastings said.

Mississippi Gov. Haley Barbour, who may challenge the president next year, suggested that Obama is quietly cheering for even higher prices at the pump.

“The Obama energy policy to me seems very clear. It's to increase the cost of energy so Americans will use less of it,” Barbour said at a conference organized by the Wall Street Journal. “When you shut in the Gulf of Mexico, and American domestic oil production goes down, to me that is bad policy for our country.” [NPR, 3/10/11]

Politico. From a March 11 Politico article:

In an unusual move, the White House announced a specific subject matter for the news conference, saying he would address "rising energy prices among other issues."

In recent days, GOP leaders have launched a concerted political offensive on the subject, trying to blame Obama as gas prices have topped $4 a gallon in some areas.

“The Obama administration has consistently blocked American energy production,” House Speaker John Boehner (R-Ohio) said Thursday at a press conference with the chairmen of the House Energy and Natural Resources committees where he touted an “American Energy Initiative.”

“Americans looking at the price of gas at the pump these days are justifiably upset,” Senate Minority Leader Mitch McConnell (R-Ky.) also went after Obama on the Senate floor. “What they may not realize is that some in the Administration are actively working to prevent us from increasing our own oil production here at home.”

While Obama has taken intense heat from both parties for effectively shutting down new deepwater drilling in the Gulf after last year's devastating Deepwater Horizon spill, he insisted Friday that U.S. oil production is actually increasing. [Politico, 3/11/11]

FoxNews.com. From a March 11 post on Fox News' America's Election HQ:

“Now that Obama and Chu's policies are working--pushing gas prices near $4--he's running away from his promise to send prices skyrocketing,” Barbour posted on his Twitter account this morning.

Although his stance is not new, the timing of Barbour's critique is in sync with a growing chorus of Republicans who are tying the president's energy strategy to prices at the pump. House Speaker John Boehner blasted the White House Thursday while announcing a GOP initiative focused on more domestic energy production.

“The Obama administration has consistently blocked American energy production that would lower costs and create jobs in our country,” said Boehner. “They've canceled new leases for exploration, jeopardized our nuclear energy industry, and imposed a de facto moratorium on future drilling in our country. They've even pushed a cap-and-trade energy tax that the president himself admitted would cause the price of energy to skyrocket.”

At the midday press briefing today, President Obama flatly rejected critics, noting that last year, domestic oil production reached its highest level since 2003, “Any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn't match up with reality.” [FoxNews.com, America's Election HQ, 3/11/11]

New York Post. From a March 9 New York Post article:

Forget the Middle East -- the White House is the real culprit behind soaring gasoline prices, Republican lawmakers declared yesterday.

Sen. David Vitter (R-La.) complained that President Obama's stubborn resistance to domestic oil drilling makes America more vulnerable to price hikes resulting from Mideast turmoil.

The senator's outrage coincided with the average price of a gallon of regular gasoline yesterday hitting $3.71 in New York and $3.51 nationwide, up 38 cents from a month ago, according to the American Automobile Association. [New York Post, 3/9/11]

CNN. From the March 13 edition of State of the Union with Candy Crowley:

CANDY CROWLEY (host): We're down to one minute, so I want to switch to gas prices. Should the president open up that strategic oil reserve to put more supply in the country and bring down prices?

SEN. JON KYL (R-AZ): No, the problem is not supply, as all the experts will say. By the way, gas prices have doubled under Obama. And one of the reasons is because he has not issued drilling permits, including in the Gulf. And that's what President Clinton was criticizing him for. According to the DOE's own figures, we've lost 13 -- or we will lose 13 percent of the production this year. We can get American energy on-line if we simply grant the permits and so the companies can start the drilling.

CROWLEY: Can I do quickly, yes or no, should he open up that oil reserve?

REP. KEVIN McCARTHY (R-CA): No, he should open up the resources across America. And that's what the Republicans, when they produce the energy, all of the above. [CNN, State of the Union, 3/13/11, via Nexis]

Fox Broadcasting Co. From the March 13 edition of Fox News Sunday:

CHRIS WALLACE (host): Question: is President Obama to blame for rising gas prices?

SEN. MITCH McCONNELL (R-KY): Well, he certainly participated, because in spite of what you just heard him say, oil production is up slightly principally because of actions taken by the previous administration. But this administration in the last two years has been shutting down wells.

Senator Vitter from Louisiana had a whole list of rigs in the Gulf of Mexico and were they have been moved around the world. Bureaucrats making it very difficult to get permits. There has been a conscious effort to make it difficult to drill in this country. [Fox Broadcasting Co., Fox News Sunday, 3/13/11, via Nexis]