On April 19, Fox & Friends co-hosts and guest radio host Neal Boortz again pushed the claim that an increase in domestic drilling would lower gas prices in the near future. However, as Media Matters has previously documented, experts have repeatedly said that increased drilling would have no immediate impact on gas prices.
Fox & Friends Decides: Increase Drilling “And We Will Soon See Gas Prices On The Way Down”
Boortz: “Open Our ANWR, Get Drilling Offshore...And We Will Soon See Gas Prices On The Way Down.” During the April 19 edition of Fox News' Fox & Friends, co-host Brian Kilmeade hosted a segment with Boortz to discuss national gas prices. During the segment, Boortz stated: “The best thing that Obama can do right now is to get out of the way. Let the market handle the price of oil and gas, open up our ANWR [Arctic National Wildlife Refuge], get drilling offshore, let the shale in the western states be processed for oil, let the free market into this picture, and we will soon see the gas prices on the way down.” [Fox News, Fox & Friends, 4/19/11]
Kilmeade And Doocy Agree: “We Could Be Self-Sufficient If We Wanted To ... Put More Oil Rigs Out In The Gulf.” During a later segment from the April 19 broadcast of Fox & Friends, the co-hosts discussed the recent increase in domestic gas prices and suggested that “drill[ing] more” would lower prices. From the broadcast:
KILMEADE: We have no control of our oil consumption -- production because we choose not to. We could be self-sufficient if we wanted to. Therefore, speculators will always have a say in how much we're paying for gas.
DOOCY: Yeah, but we could drill more oil rigs, put more oil rigs out in the gulf. We could punch some holes in the ground at ANWR--
KILMEADE: No, I know. We don't.
DOOCY: But we don't. Exactly right. [Fox News, Fox & Friends, 4/19/11]
Experts Agree: Domestic Drilling Increases Won't Substantially Affect Gasoline Prices
AEI Scholar: “We Probably Couldn't Produce Enough To Affect The World Price Of Oil.” According to a Greenwire article published by the New York Times:
If gas prices keep increasing, Republicans probably will make a push on increased fossil fuel production, said Ken Green, resident scholar with the American Enterprise Institute think tank.
But experts disagreed about how much impact additional drilling could have. Crude oil is a global commodity, Green said.
“The world price is the world price,” Green said. “Even if we were producing 100 percent of our oil,” he said, if prices increase because of a shortage in China or India, “our price would go up to the same thing.
”We probably couldn't produce enough to affect the world price of oil," Green added. “People don't understand that.”
U.S. production could be negated by decisions that the Organization of Petroleum Exporting Countries makes, said Philip Verleger Jr., energy economist, and David Mitchell EnCana, professor of management, at the University of Calgary's business school.
“Suppose the U.S. were to boost production 1 million barrels a day,” Verleger said. “OPEC has the capacity to cut 1 million barrels.”
The oil industry has been able to convince people there is a connection between U.S. drilling and prices, Verleger said. [Greenwire via NYTimes.com, 1/4/11]
DOE In 2009: Reinstating Offshore Drilling Ban Would Increase Prices By Merely 3 Cents Per Gallon. According to the Department of Energy's 2009 Annual Energy Outlook, limited access to offshore oil drilling would lead to “a small increase in world oil prices,” including “3 cents per gallon” for gasoline in 2030. The DOE estimated that limited access to offshore oil drilling would not affect the price of gasoline before 2020. [U.S. Department of Energy, Energy Information Administration, accessed 3/08/11]
Bush Administration Energy Department: Additional Offshore Drilling “Would Not Have A Significant Impact” On Crude Oil Prices Before 2030. According to a 2007 report by the U.S. Energy Information Administration:
The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher--2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case (Figure 20). Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant. [U.S. Department of Energy, Energy Information Administration, accessed 3/7/11]
PolitiFact: Experts Agree That Expanding Offshore Drilling “Would Have Little Effect At The Pump Any Time Soon.” In December, PolitiFact analyzed the statement that a “5 percent increase in domestic production would increase the world supply by less than 1 percent and do almost nothing to our dependence on foreign oil. This would also have virtually no effect on the price of gas at the pump.” PolitiFact concluded:
Let's review: Wasserman Schultz's math adds up -- Gulf drilling does indeed represent about 5 percent of current domestic production, and a 5 percent increase would barely register in terms of the world supply. And the experts we found for this Truth-O-Meter as well as ones cited in the past about McCain's claim agree that expanding drilling now would have little effect at the pump any time soon. [PolitiFact.com, 12/1/10]
Newsweek: Oil Prices “Determined By Global Supply And Global Demand.” From a March 31, 2010, Newsweek commentary by Ben Adler:
Oil, you see, is a fungible global commodity. The oil that one drills for in Texas powers a car the same way that oil from Kuwait does. So the price that Texans pay for oil is determined by global supply and global demand, not how much oil is drilled on the Gulf Coast.
In a market economy such as ours, opening an area for drilling does not mean that the U.S. government controls its destination. Shell and Chevron will be perfectly happy to sell their oil to China if Chinese drivers are willing to pay more than Americans. The U.S. could produce exactly as much gasoline as it consumes and it would still feel the effects of, say, a decision by Hugo Chávez or Vladimir Putin to stop selling any oil. If global supply drops precipitously, global prices will rise, and unless we plan on nationalizing the oil industry--a move I doubt either Democrats or Republicans will endorse--the fact that we are drilling for more oil near our shores won't protect us from the price shock. [Newsweek, 3/31/10]
EIA: “Arctic Oil And Natural Gas Resources Will Be Considerably More Expensive, Risky, And Take Longer To Develop.” According to a report on the potential of Arctic oil and natural gas resources prepared by the Oil and Gas division of the U.S. Energy Information Administration's Office of Integrated Analysis and Forecasting:
The Arctic presents a “good news, bad news” situation for oil and natural gas development. The good news is that the Arctic holds about 22 percent of the world's undiscovered conventional oil and natural gas resources, based on the USGS mean estimate. The bad news is that: (1) the Arctic resource base is largely composed of natural gas and natural gas liquids, which are significantly more expensive to transport over long distances than oil; (2) the Arctic oil and natural gas resources will be considerably more expensive, risky, and take longer to develop than comparable deposits found elsewhere in the world; (3) unresolved Arctic sovereignty claims could preclude or substantially delay development of those oil and natural gas resources where economic sovereignty claims overlap; and (4) protecting the Arctic environment will be costly. The high cost and long lead-times of Arctic oil and natural gas development undercut the immediate importance of these sovereignty claims, while at the same time diminishing the economic incentive to develop these resources.
The bottom line for Arctic oil and natural gas potential is that high costs, high risks, and lengthy lead-times can all serve to deter their development in preference to the development of less challenging oil and natural gas resources elsewhere in the world. Also, the less abundant Arctic oil resources will be more readily developed than the Arctic's natural gas resources. [U.S. Energy Information Administration, “Arctic Oil and Natural Gas Potential,” 10/09, emphasis added]
EIA Analyst: Total Offshore Production Would Amount To “Less Than 1 Percent Of The Total Projected International Consumption” In 2030. From a September 2008 Scientific American article:
So are promises of U.S. oil independence real--or rhetoric? The issue is not whether the U.S. can significantly reduce its reliance on oil imports with domestic, offshore oil, say both [oil expert Robert] Kaufman and [energy researcher Ian] Nathan, but whether there is enough that is recoverable to significantly lower the price of a barrel of oil on the global market.
Even by 2030, offshore drilling would not have a significant impact on oil prices, according to [EIA analyst Phyllis] Martin, because oil prices are determined on the global market. “The amount of total production anticipated--around 200,000 barrels a day--would be less than 1 percent of the total projected international consumption.”
And disruptions to the global supply affect the price of every barrel of oil the U.S. purchases, whether it be from Saudi Arabia, Venezuela or off the New Jersey coast. “Suppose the U.S. got all its oil domestically, and the price was $100 a barrel. Then the Saudi family was deposed,” disrupting that country's oil exports, Kaufman says. “The Saudis produce about 10 million barrels a day of the world's 85 million, so clearly prices would go up, because now there is this big shortfall of oil.”
“Do you think oil companies are going to sell [U.S. oil] to U.S. consumers for anything less than top price?,” he asks. “The answer is no.” [Scientific American, 9/12/08]