Obama in Oklahoma: Rhetoric vs. Reality
March 21, 2012
Posted by Katie Brown Katie_Brown@epw.senate.gov
Obama in Oklahoma: Rhetoric vs. Reality
In preparation for President Obama's speech in Cushing, Oklahoma tomorrow, it's worth taking a look at his reelection rhetoric vs. the reality of his destructive energy policies. Remember, when President Obama first took office, he told us that the world was headed for unspeakable global warming catastrophe so we had to put a price on carbon to get us off oil, gas, and coal; he said that under his plan of a cap-and-trade system, energy prices would "necessarily skyrocket." He told us that companies like Solyndra were leading the way to a "brighter and more prosperous future" and that we had to subsidize them to the tune of billions of dollars so we could save the world.
How does a President who truly believes that fossil fuels are destroying the planet end up standing in the middle an oil field in Oklahoma touting oil and gas development? There's only one feasible answer: both the global warming movement and his Solyndra fantasy have completely collapsed - and his policies of putting a price on carbon have hit the pocketbooks of hard working American families in the form of higher gas and electricity costs. He is crisis mode, trying desperately to save his job amid the skyrocketing gas prices that he wanted so badly.
Pipeline from Cushing to the Gulf
One of the reasons for President Obama's visit to Oklahoma is undoubtedly to take credit for the portion of the Keystone pipeline that is to run from Cushing to the Gulf - but this part of the pipeline does not require presidential permission at all. The only hurdles left to surmount are a Section 404 Clean Water Act permit from the Army Corps of Engineers and a Section 7 Consultation by the Fish and Wildlife Service. In fact, these permits could have been approved long ago, as this portion of the pipeline has already undergone extensive environmental reviews, but the Obama administration shut down work on them.
The White House already announced on February 27 that they will "take every step possible to expedite the necessary federal permits" so tomorrow's announcement is redundant. To hold the President to his word, Senator Inhofe asked Chairman Boxer to hold an Environment and Public Works Committee field hearing in Cushing, Oklahoma to provide oversight over the permitting process - he has not received a definitive answer. Expediting the permits is the least the President can do - what he should do is approve the entire Keystone project.
Tomorrow, Oklahomans will no doubt want to ask the President: if you say you support this smaller pipeline, why not approve the larger Keystone pipeline project? If you believe opening resources from Cushing and transporting them to the Gulf will help give us affordable energy and increase our energy security, wouldn't increasing access to resources from North Dakota and Canada do even more to achieve those goals?
Domestic Oil Production
The President will no doubt claim again that U.S. oil production has increased under his Administration, but he is grossly misrepresenting the facts. Increases in domestic oil production have taken place on state and private lands because the President can't stop it, such as North Dakota where production has gone up by over 250 percent - but the opposite is happening on federal lands, where President Obama has control: production is rapidly falling.
- Natural gas sales of production from federal lands are down 17 percent since 2008 and 32 percent on federal lands since 2003.
- Total fossil fuel sales of production from federal lands are down since 2008.
- Domestic oil production in Alaska and the Gulf of Mexico have both decreased by 15 percent since President Obama took office.
- The Bureau of Land Management admitted that oil production was down 15 percent on federal lands.
- Production from federal offshore leases is down 17 percent.
President Obama will inevitably take credit for reducing consumption of foreign oil; but he probably won't mention that his administration is actively supporting increasing imports from Saudi Arabia and considering tapping into our emergency reserves, all while they are turning down increased domestic supply from North Dakota and Montana along with imports from our good friend Canada by rejecting the Keystone pipeline. As Energy Secretary Steven Chu said yesterday, "We're very grateful that Saudi Arabia has extra capacity and it feels confident that it can fulfill any potential deficits, at least the way the current markets are now, the current demand I should say, are now." Grateful to Saudi Arabia? Did Secretary Chu miss the Presidential memo?
It's also unlikely that President Obama will mention that one of the main reasons American families are using less oil is because they can no longer afford the skyrocketing energy costs President Obama's policies have imposed on them. According to the US Energy Information Administration (EIA) our lessened reliance on foreign oil "results from a variety of factors. Chief among those is a significant contraction in consumption...This decline partly reflects the downturn in the underlying economy."
- Gas prices have almost doubled since President Obama took office. The average price hit a record of $3.50 in 2011, is up to $3.86 today, and the cost is expected by some to hit close to $5 a gallon by Memorial Day. But this is all part of the plan. Remember the President's Energy Secretary Steven Chu said that "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe."
- The Obama EPA is poised to propose a significant gas price increase through its discretionary Tier 3 Gas Standards rulemaking.
- In 2011, consumers spent on average $4,155 or, 8.4 percent of the median family income on gasoline, more than any year since Jimmy Carter's final year in office.
The 2% Talking Point
President Obama wishes that America only had 2% of the world's oil reserves so that he can force us into his policies of energy austerity. But he is wrong: according to a report by the non-partisan Congressional Research Service, America possesses the largest combined oil, natural gas, and coal resources on Earth - more than Saudi Arabia, China, and Canada combined. In other words, we can drill our way to lower gas prices. That's because America has much more than just "proven" oil reserves. The only way to calculate "proven" reserves is to drill. But President Obama and his allies have done everything they can to stop drilling, including putting 83 percent of America's federal lands off limits. Of course, this is no surprise: as the chairman of the White House Council of Economic Advisers Alan Krueger said, "The administration believes that it is no longer sufficient to address our nation's energy needs by finding more fossil fuels." If the first report isn't enough, another CRS report has revealed that in 1973, the world's proven reserves were around 600 billion barrels of oil, but by 2008 they increased to over 1.2 trillion during times of greater production and demand - so the numbers only continue to grow.
- Oil - America, the world's third-largest oil producer, is endowed with 161.9 billion barrels of recoverable oil. That's enough oil to maintain America's current rates of production and replace imports from the Persian Gulf for more than 50 years.
- Natural Gas - America's future supply of natural gas is 2,047 trillion cubic feet (TCF). At today's rate of use, this is enough natural gas to meet American demand for 90 years.
- Coal - The report also shows that America is number one in coal resources, accounting for more than 27% of the world's coal.
Taxing Oil and Gas
It would be a bold move for President Obama to repeat his intention to tax oil and gas in Oklahoma. But whether he says it or not, President Obama remains determined to put a price on carbon, and this proposed tax is very much a part of that plan. The President's budget proposal for this year amounts to a $38.6 billion tax increase on oil and gas companies; it will hit hard in Oklahoma, where 70,000 people are employed in oil and gas development and those jobs contribute $26 billion a year to the state's economy. Of course, oil and gas companies don't receive checks, grants, or direct payments from the federal Treasury, as companies like Solyndra did. This is simply an effort to make the development of oil and gas more expensive - and will only have the effect of increasing prices at the pump as companies will pass these extra expenses on to American consumers. It will also result in less domestic oil production, putting our energy security even more at risk.
Rhetoric vs. Reality
The reelection rhetoric we will hear from President Obama as he stands in an oilfield in Oklahoma tomorrow is designed to put a positive spin on the failed energy policies he has no intention of giving up on. The truth is that he is doing everything he can to stop oil, gas and coal development, and if he is successful, the reality will hit hard.