Conservatives Falsely Blame Obama Drilling Policies For Rise In Oil Prices


Conservative media figures have blamed the recent increases in oil and gas prices on President Obama's drilling policies. However, experts point to expectations of increased demand and other factors.

Conservative Media: Obama's Policies Caused Oil And Gas Prices To Rise

Beck: Oil Prices Rising Because "The Administration [Is] Making It Harder To Drill." From the January 4 edition of Fox News' Glenn Beck:

BECK: I told you that they have a plan. They have a destination. They have a solution. But they needed to create the problem. Never waste a crisis. You have the solution, never waste the crisis to bring you to that solution. You create the problem so the public will beg for the solution that you have designed. What are the problems they're creating? Oil going up. Why? The administration making it harder to drill. [Fox News, Glenn Beck, 1/4/11]

Fox News' Jim Angle: "Many Argue The President's Policies" Are Pushing Up Gas Prices. From the January 4 edition of Fox News' Special Report with Bret Baier:

ANGLE: President Obama has rededicated himself to creating jobs this year. But rapidly increasing prices for oil and gasoline threaten that goal, and many argue the president's policies are making things worse.

One former oil man warned then-Senator Obama back in 2007.

JOHN HOFMEISTER (former Shell Oil president): I said, "Senator, if you don't do something in your first term, if you're successful, to increase hydrocarbon production in this country, you will be on your knees in 2012."

ANGLE: But he says the administration has punted on domestic production. In fact, the administration has roped off some 85 percent of the outer continental shelf, leaving the industry few places to go. [Fox News, Special Report, 1/4/11]

Daily Caller: Obama's Policies "Put A Luxury Price Tag" On Energy. From a January 4 Daily Caller column by Deneen Borelli titled, "Obama energy policies to create a winter of discontent":

As the thermometer dips lower and snow begins to pile up, the need for cheap and efficient power for heat and light is essential. But the Obama administration's war on fossil fuels is making it increasingly unlikely that the nation's poorest citizens will be comfortable this winter.

Millions of Americans are unemployed, and countless others are suffering from the ailing national economy. Obama administration policies limiting the availability and raising the price of energy derived from fossil fuels are stretching family budgets and the resources of charities past their limits.

From the moratorium on offshore oil exploration to restrictions on coal mining to a blind faith in alternative energy sources such as wind and solar, the Obama administration's energy policies put a luxury price tag on a basic necessity. [, 1/4/11]

In Fact, Experts Point To Speculation and Boost In Demand

WSJ: Rise In Oil Prices "Has Been In Anticipation Of Improving Supply And Demand Conditions." The Wall Street Journal reported on December 30: "The 12% rise in crude oil since mid-November has been in anticipation of improving supply and demand conditions. Demand in China and better-than-expected data on the U.S economy helped push oil to fresh two-year highs this month. Now, investors appear more cautious heading into 2011." [Wall Street Journal, 12/30/10]

AEI Scholar: "We Probably Couldn't Produce Enough To Affect The World Price Of Oil." From a January 1 Greenwire report:

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, 1/4/11] Experts Say "Consumption Growth In Developing Countries," Rather Than Drilling Policies, Caused Increase In Oil Prices. From a December 3 article on

The rise in oil comes on the same week that the Obama administration announced it will not allow offshore drilling in the eastern Gulf of Mexico or off the Atlantic coast for at least seven more years because of the Deepwater Horizon oil rig explosion in April that killed 11 workers and unleashed about 5 million barrels of oil into the Gulf.

That decision was cheered by environmental interests and Democratic lawmakers along both coasts but slammed by Republicans and the oil and gas industry who say the move will kill jobs and make America even more dependent on foreign oil.

Energy analysts though did not blame the announcement for the surge in oil prices. Instead, they pointed to consumption growth in developing nations.


Kevin Book, managing director of Clearview Energy Partners, told that his firm sees oil rising to $107 a barrel in 2013 "if economic growth follows its current trajectory."

Book explained that his firm's forecast implies that there is substantial non-OPEC slow downs at the same time as there is significant demand growing in emerging economies in Asia and other places.

"What it does is draw inventory down and lowers capacity in the system," he said. "It also pulls more OPEC oil into circulation."

The Obama administration's announcement reversed it's decision to hunt for oil and gas that the president himself announced three weeks before the largest offshore oil spill in U.S. history. The oil and gas industry and many Republicans say the Obama administration is stifling domestic oil production and contradicting the will of recession-weary voters eager for new jobs.

But Book says that announcement was not a surprise and had no effect on the rise of oil. While the U.S. has an abundant supply of its own oil, environmental concerns go hand in hand with domestic production, he said.

"We're going to use OPEC's oil," he said. "The problem isn't doing business with OPEC. The problem is doing business in a world where OPEC is becoming less relevant."

"The true value of OPEC from a price stability standing to its members is predicated on the idea it has to do what it has to do or Saudi Arabia will flood the market with cheap oil," he said. [, 12/3/10]

Market Analyst Cited "Refinery Problems" Constricting Supply. From a January 3 NPR report:


As you have no doubt noticed at the gas pump, gasoline prices are back up. According to AAA's Daily Fuel Gauge Report, the national average price of a gallon of regular is now over $3. Why? Well, that's our question for Phil Flynn, senior market analyst for PFGBEST Research in Chicago.

Mr. Flynn, what's the answer? Why?

Mr. PHIL FLYNN (Senior Market Analyst, PFGBEST Research): Well, partly because the economy is getting better, believe it or not. We're seeing more demand, not only here in the United States, but throughout the globe, and that's driving up the price. But I wish that was all that there was to it. To be honest with you, what we're seeing in the price of gasoline shouldn't be happening.

SIEGEL: What are you talking about? What has happened that has aggravated this problem?

Mr. FLYNN: Well, I think if you look over the past few weeks, you have to go back to the France strikes. A few months ago, of course, because of the France austerity package, France shut down some major refineries. And when those refineries went down, Europe was scrambling to get supplies - supplies that would normally end up here in the United States.

And then after that, you had all these refinery problems. You had a refinery going down in Venezuela. You had one going down in St. Croix, one down in the East Coast. And before you knew it, we see these gasoline prices surging forward. [All Things Considered, 1/3/11] Oil Analyst Attributes Some Of Price Increase to Speculation. From a January 1 report:

Oil surge: Oil, the main ingredient in gasoline, has also been on a tear, with crude prices topping $90-a-barrel for the first time in more than two years.

Platts senior oil analyst Linda Rafield attributes some of the spike in oil prices to speculation.

"That can push prices to a level that doesn't reflect supply and demand," Rafield said. [, 1/1/11]

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