FALSE: “Do not tell me that we’re not drilling. We’re drilling all over this country. I guess there are a few spots where we’re not drilling. We’re not drilling in the National Mall. We’re not drilling at your house. I guess we could try to have, like, 200 oil rigs in the middle of the Chesapeake Bay.” (March 15, 2012, Prince George’s Community College.)
TRUE: President Obama has blocked drilling in offshore areas totaling more than 10 times the size of Texas. He has stalled progress on an estimated one trillion barrels of oil in the American West, where the federal government owns the majority of the world’s oil shale. These off-limits supplies alone give the United States some of the largest oil reserves in the world. And no one proposes drilling in the Chesapeake Bay.
FALSE: “America uses more than 20 percent of the world’s oil. If we drilled every square inch of this country — so we went to your house and we went to the National Mall and we put up those rigs everywhere — we’d still have only 2 percent of the world’s known oil reserves. Let’s say we miss something — maybe it’s 3 percent instead of 2. We’re using 20; we have 2.” (March 15, 2012, Prince George’s Community College.)
TRUE: The President derives his “2 percent” from America’s “proven reserves,” about 20 billion barrels of oil. Proven reserves are the “quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well-established or known reservoirs with the existing equipment and under the existing operating conditions.”
The U.S. was said to have 30 billion barrels of “proven reserves” in 1980. Yet from 1980 to 2008, we produced about 75 billion barrels of oil. No one thinks the proven reserves numbers come anywhere close to capturing our oil resources–even the U.S. government. The Energy Department estimated in 2006 that there were about 400 billion barrels of technically recoverable oil, including undiscovered resources and that does not even include oil shale. That’s 5 times the number President Obama is using. And oil shale is another 800 billion to 1 trillion barrels. Total estimated resources exceed 1.4 trillion barrels of oil in the United States, and Goldman Sachs predicted last year that the U.S. has the potential to be the world’s largest oil-producing country by 2017. The number the President is using, about 20 billion barrels, is less than the current best estimate for the Bakken formation in North Dakota alone.
In addition, the President’s claim that “we use 20% of the world’s oil” is false and evasive. We consume 20% of the world’s oil production, not 20% of the world’s oil reserves as the President’s comparison suggests. The President is just cherry-picking numbers. The 2 and the 20 are not meaningfully related so the comparison makes no sense—it certainly doesn’t prove we’re consuming too much or that there is too little to go around.
FALSE: “How much oil we produce here at home, because we only have 2 percent and we use 20, that’s not going to set the price of gas worldwide, or here in the United States. Oil is bought and sold on the world market.” (March 7, 2012, North Carolina)
HE EMPHASIZES THIS AGAIN AND AGAIN AND AGAIN:
We can’t just allow ourselves to be held hostage to the ups and downs of the world oil market. (February 23, 2012, Miami, FL)
We’re not going to, overnight, solve the problem of world oil markets. (February 23, 2012, Miami, FL)
“Gas prices and the world oil markets right now are putting a lot of pressure on families right now.” (March 15, 2012, Prince George’s Community College.)
“When prices spike on the world market, it’s like a tax, it’s like somebody is going into your pocket.” (March 15, 2012, Prince George’s Community College.)
TRUE: President Obama and his allies have repeatedly suggested his policies can’t be blamed for high gasoline prices because oil is “bought and sold on the world market” over which he has no control. But prices on the “world market” are determined primarily by supply and demand, and the President is blocking development of substantial oil supplies offshore and in the American West, which together are several times the known reserves of Saudi Arabia. No one has claimed the President can “set” the price of oil, but his choice to close these areas affect the price significantly.
He could reverse his policies on these federal lands with the stroke of a pen. There is nothing special about the “world market” that would prevent that large increase in supply from putting downward pressure on price.
The President’s own actions have betrayed the knowledge that even marginal production changes have a significant effect on oil prices. When his administration asked Saudi Arabia to increase its own oil production, its goal was to lower prices in the U.S., and when he tapped the Strategic Reserve during the Arab Spring in 2011, he did so for the same reason. His claims to be powerless in the “world market” are just a bad excuse for the results of his anti—American-energy policies.
FALSE: “What’s more, at a time when big oil companies are making more money than ever before, we’re still giving them $4 billion of your tax dollars in subsidies every year.” (President’s Weekly Address, March 17, 2012)
“I don’t think oil companies need more corporate welfare. Congress should end this taxpayer giveaway.” (President’s Weekly Address, March 3, 2012)
TRUE: The oil industry is not subsidized. It is subject to generic tax deductions that apply to all U.S. manufacturers. What the President proposes is specifically targeting oil companies for tax increases, not ending subsides that are given specifically to the oil industry.
Under this view, the “giveaway” is that we are not taxing oil companies for the same things we do not tax anyone else. But not taxing an activity isn’t a “subsidy” or a “taxpayer giveaway”—unless you consider the income you’re allowed to keep a “subsidy,” too.
In addition, the President wants to end rules that prevent American companies from being double-taxed on energy they produce outside the United States, which would only benefit foreign competitors at the expense of American businesses.
The industry that is highly subsidized and receives “corporate welfare” under the Obama administration is the “green” energy industry—companies like Solyndra. The vast majority of energy sector tax preferences have been for renewables or energy efficiency companies. As the Congressional Budget Office recently reported, “Between 2009 and 2012, DOE provided an estimated $4.0 billion in subsidies for about $25 billion in loans.”
If the President is genuinely concerned about high gas prices, raising taxes on oil producers will cause gasoline prices to increase and will hurt consumers—whether he thinks that’s “fair” or not.
FALSE: If we’re going to take control of our energy future and can start avoiding these annual gas price spikes that happen every year … if we’re going to avoid being at the mercy of these world events, we’ve got to have a sustained, all-of-the-above strategy that develops every available source of American energy. Yes, oil and gas, but also wind and solar and nuclear and biofuels, and more. (February 23, 2012, Miami, FL)
TRUE: If 100% of American electricity today were generated by solar and wind technologies such as the President is pushing, it would have virtually no effect on the price of gasoline. Wind and solar are methods of generating electricity which we use to power our buildings. Gasoline is the fuel for our cars. We barely use oil at all to generate electricity, meaning that converting everything to wind and solar would do nothing to decrease the consumption of oil. The only circumstance under which the technologies President Obama mentions would be an answer to high gasoline prices is if wind and solar were economically competitive sources of electricity and we drove inexpensive electric cars with capacities comparable to conventional automobiles. But today that is a distant fantasy, not a solution.