Oil production is booming in spite of Obama
If you are one of the millions of Americans who has to fill up their own gas tank, you already know that gas prices are rising … and fast. According to the U.S. Energy Information Administration, the average price for a gallon of gas is $3.59 nationwide, up almost 7 percent from just one week ago. Many analysts, including Oil Price Information Service’s Tom Kloza, believe gas will continue to surge past $4.00 a gallon, and may even hit $4.25 nationwide by April. To put that in perspective, the all-time record high for an average gallon of price is $4.11. The last time gas prices hit that mark was July 2008, right as the U.S. economy was sinking into recession.
Desperate to not become the target of motorist rage over gas prices, President Obama delivered a speech in Miami Thursday explaining why he isn’t to blame. “Now, we absolutely need safe, responsible oil production here in America. That’s why under my Administration, America is producing more oil today than at any time in the last eight years,” Obama said.
And that is technically true: American oil production is the highest that it’s been in eight years. But this is happening in spite of Obama and his policies, not because of them.
What Obama did not mention today is that much of the rise in domestic oil production is due to energy development on private and state lands that Obama has no control over. Since 2000, oil production on lands not owned by the federal government is up 11 percent. Meanwhile, development on federal lands can take years. To the extent that oil production has risen on federal lands, and there is dispute over whether it is up at all, it is the result of lease sales made years ago by President Bush. As far as Obama’s actual policy record, it shows that he has done everything he can to thwart oil and gas production:
- Immediately after taking office in 2009, Obama canceled 77 leases for oil and gas drilling in Utah.
- In January 2010, Obama issued new regulations making it more difficult to develop energy resources on federal land.
- After the BP oil spill, Obama needlessly instituted, not one, but two outright drilling bans in the Gulf of Mexico.
- After rescinding his outright offshore drilling ban, Obama then refused to issue any new drilling permits in the Gulf, a policy that the Energy Information Administration estimated would cut domestic offshore oil production by 13% that year.
- In 2010, Obama issued the lowest number of onshore leases since 1984.
- In 2011, Obama held just one offshore lease sale in all of fiscal year 2011. President Bush’s energy plan called for five.
- So far in his presidency, Obama has leased less than half of the offshore acres that President Clinton did.
- Obama is also blocking access to 19 billion barrels of oil in the Pacific and Atlantic coasts and the eastern Gulf of Mexico, another 10 billion barrels estimated in the Chukchi Sea off the Alaskan coast, and another 10 billion barrels of oil in the Arctic National Wildlife Reserve..
- Obama’s budget wants to exclude the oil and gas industry from the Section 199 manufacturers’ tax deduction. All other industries get to keep this tax break.
- Obama’s budget proposes raising royalty rates for onshore oil and natural gas leases. This $27 billion tax hike will be passed directly to consumers at the pump.
Obama’s actual policies, not the rhetoric he deployed in Miami Thursday, closely match the promises he and his cabinet made before they were in office. For example, his Energy Secretary Steven Chu famously told The Wall Street Journal in 2008, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” And when Obama was asked by CNBC’s John Harwood that same year if high gas prices actually “helped” the United States, Obama said, “I think that I would have preferred a gradual adjustment.”
When Obama took office gas was $1.85 a gallon. A little over three years later gas is up to almost $3.60. If anything, today’s gas prices are exactly what Obama wanted to happen.