Free Market Fundamentalist Opinion

White House Takes Credit for Record Oil Production

President Obama said that oil production had risen to a decade high. Except he had nothing to do with that.

President Barack Obama on Friday rejected criticism from Republicans that his administration was hurting the American oil industry. Indeed, he pointed out that oil production last year rose to its highest level in seven years and added that his government was prepared to encourage new drilling in the face of rising gas prices.

After imposing a de facto moratorium on deepwater drilling in the Gulf of Mexico, the administration issued its second permit for exploration in the area since the oil spill of last summer. More than a hundred permits are still pending review.

With the turmoil in the Middle East driving up the cost of crude oil, Republicans have proposed to expand domestic production far more dramatically than the administration seems willing to, the president’s rhetoric notwithstanding.

According to House speaker John Boehner, the Obama Administration “has consistently blocked American energy production that would lower costs and create jobs in our country.”

Gasoline prices have skyrocketed under Obama’s watch. When he took office in January 2009, the average price of a gallon of gas was $1.83. Last week, it stood at $3.14.

American oil production has climbed to its highest level since 2003 but the president had nothing to do with that. As Steve Maley notes at RedState, production has been on the rise since the late 1990s. Recent expansion, he writes, “is due almost entirely to a handful of large deepwater fields, notably BP’s Thunder Horse, which came on production during that time frame.”

The Thunder Horse platform, which is capable of producing close to 250,000 barrels per day, was licensed during the Reagan and Clinton Administrations. The discovery well was drilled in 1999 and the platform was set in 2005.

Not only has the president’s Bureau of Ocean Energy Management, Regulation and Enforcement effectively perpetuated a moratorium on drilling in the Gulf — which was struck down in court as “arbitrary and capricious” — the Environmental Protection Agency recently revoked a longstanding permit for a surface mine in West Virginia, one of the largest coal producers in the nation and Obama himself has reversed an earlier decision to open access to coastal waters for exploration, instead placing a seven year ban on drilling along the Atlantic and Pacific coastlines.

As Maley puts it, “we have essentially stopped looking for the next Thunder Horse.”

There are vast reserves of oil and natural gas waiting to be exploited underneath the Atlantic coastline, beneath the northern coast of Alaska, and on land, in Colorado and Wyoming. Combined, these regions are estimated to hold over two hundred billion barrels of oil and 2,000 trillion cubic feet of natural gas that are recoverable with today’s technology. If fully developed, it would be enough to free the United States from the import of foreign oil for many decades.

Yet according to the president, “drilling alone cannot come close to meeting [America’s] long-term energy needs.”

Instead of letting energy companies drill at home, the president called for a crackdown on “price gouging” at the pump. Without offering a shred of evidence, the president fueled suggestions of price manipulation, as though big oil is to blame for the shortcomings of his energy policy.

This is a travesty. The president’s own energy secretary believes that gasoline prices should rise in order to convince the nation to switch to alternative fuels. It is because of the administration’s irrational, anticapitalist and supposedly “green” energy agenda that Americans are paying dearly at the pump.

Then Senator Obama told the San Francisco Chronicle in January 2008:

If somebody wants to build a coal power plant they can, it’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.

He was referring to cap-and-trade legislation which failed during the last Congress despite enthusiastic support from Senate Majority Leader Harry Reid. His proposal would have reduced carbon emissions by forcing energy companies to produce more and more renewable energy with each passing year — essentially cap-and-trade but without the trade.

Yet the United States are overwhelmingly dependent on comparatively cheap fossil fuels for their energy needs. Fossil fuels power 83 percent of the American economy.

Green energies have received extravagant subsidies in both Europe and the United States yet America uses more oil than ever. Americans get less than 2 percent of their energy from solar and wind combined and less than 4 percent of their energy, including transportation fuel, from biofuels and other plant and animal sources. The reason? Solar, wind and biofuels have proven utterly incapable of matching two of oil’s key virtues — low price and enormous abundance.