President Barack Obama’s frantic efforts to deflect blame for rising gasoline prices continued this week and became even more incoherent and contradictory. Following up his speech on energy policy last week at the University of Miami in Florida, on 1st March the President spoke at Nashua Community College in New Hampshire.
President Obama repeated some of the same points that he made in Miami, but dropped any mention of the promising research in using algae to produce biofuels. He took credit for increasing domestic oil and gas production, but argued that “…anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about or they’re not telling you the truth. (Applause.) One or the other.”
According to the President, that’s because the United States consumes 20% of the world’s oil production, but has only 2% of the reserves. “And no matter what we do, it’s not going to get much above 3 percent.” This is a simple misunderstanding that anyone who knows anything about oil statistics could correct. The U. S. has only 2% of the world’s proven reserves. The U. S. also has more areas of high potential reserves that haven’t been explored than any other country. Until those areas are explored, the oil that they possibly contain is not included in the estimate of proven economically recoverable reserves.
The President went so far in taking credit for recent increases in U. S. oil production that he had a chart handed out to those attending his Nashua speech. As has been pointed out repeatedly, increasing domestic oil and natural gas production has come entirely from private lands. Production from federal lands and Outer Continental Shelf areas has declined and is forecast to continue to decline as a result of Obama Administration policies.
The President went on to argue that the solution to current high gas prices was to be found in the administration’s long-term policies to decrease consumption of oil by requiring much higher Corporate Average Fuel Economy (or CAFÉ) standards for cars, light trucks, and heavy trucks and to develop alternatives that could replace oil. Wind and solar power apparently qualify because higher CAFÉ standards will increase the number of electric vehicles being sold.
If decreasing demand can lower gasoline prices, then increasing supply must also lower gasoline prices. The President could lower oil futures contracts tomorrow if he announced that he now supported legislation to open the Arctic National Wildlife Refuge in Alaska and significant OCS tracts to oil exploration. If he added that he would also support language to expedite leasing and permitting on all federal tracts, the price declines could be quite dramatic.