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Fact-Checking Washington's Rhetoric on Energy and Drilling for Oil

April 25th 2011

Energy Topics - Oil Barrels 400px

With gas prices rising, the rhetoric in Washington about drilling is becoming increasingly intense.

On one side of the battle, is President Obama. He recently outlined a proposal to reduce the country’s dependence on foreign oil by one-third by 2025, while continuing to drill responsibly, beefing up fuel-economy standards and promoting electric vehicles.

On the other side of the battle are Republicans and many drill-state Democrats. While they agree with Obama’s policy agenda broadly, they say the administration is not moving quickly enough to expand domestic oil and natural gas production.

With the 2012 elections looming and the public’s frustration with high gas prices reverberating in lawmakers’ home states, each side is accusing the other of manipulating the facts to suit its priorities.

Obama, for example, has taken issue with Republican criticisms that his administration is blocking oil and gas development in the Gulf. Noting that his administration has issued more than 10 deepwater drilling permits and several dozen shallow water permits for projects that were halted after the spill, Obama says that U.S. oil production reached its highest level since 2003 in 2010.

On April 22, Sen. Lisa Murkowski (R-Alaska), the top Republican on the Senate Energy and Natural Resources Committee, wrote an op-ed in the Washington Post titled, “Setting the record straight on America’s oil.”

In the op-ed, Murkowski criticized Obama for, among other things, saying that the United States has just 2 percent of the world’s proven oil reserves.

“That line is crafted to make the audience think that America is both running out of oil and using oil at an unsustainable rate,” Murkowski said.

But which side has the facts to back up their claims? Some fact-checking follows.

Here are the facts about oil in the United States, based on a review of data from the Energy Information Administration, the Energy Department’s statistical arm:

What impact will additional drilling have on gas prices?

Even a dramatic expansion of domestic oil and gas drilling will have little effect on oil and gas prices, as they are largely set on world markets.

Here’s EIA Administrator Richard Newell, in written testimony delivered to the House Natural Resources Committee March 17:

“Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements.”

But Newell said that longer-term domestic production “would impact local economic activity, net oil imports, and the associated U.S. international trade balance resulting from oil imports.”

How much oil did the United States produce in 2010?

In 2010, U.S. oil production reached its highest level since 2003. The United States produced about 5.5 million barrels of oil a day in 2010, according to EIA data.

U.S. oil production peaked in 1970 when the country produced 9.6 million barrels a day.

Who is responsible for the increase in oil production in 2010?

The increase is a result of a series of decisions made by policymakers over the last administrations. It is not a result of the Obama administration’s policies alone.

Here is EIA spokesman Jonathan Cogan with an explanation:

“Over the last several years increased U.S. crude oil production has come from large offshore projects coming online in the deepwater Gulf of Mexico, as a result of increased production from enhanced oil recovery using carbon dioxide at existing onshore fields, and from rapid development of production from North Dakota’s Baaken Shale formation.”

How much oil will the United States produce in the coming years?

Oil production is projected to go down in 2011 and 2012 by about 190,000 barrels per day, EIA says.

That is expected to bring U.S. domestic oil production down from 5.51 million barrels a day in 2010 to 5.40 million barrels a day in 2011 and 5.27 million barrels a day in 2012.

The cause? Cogan says it’s a result of the “natural rate of decline in existing wells,” as well as the lasting effect of the Gulf of Mexico moratorium that was imposed after last year’s oil spill and the slow-down in permitting in the Gulf.

How many barrels of proven oil reserves does the United States have?

The EIA says the United States has 20.7 billion barrels of proven oil reserves as of 2009, the year with the most up-to-date data available.

How does that compare with other countries?

U.S. proven reserves are significantly smaller than countries like Canada (178.1 billion barrels), Venezuela (99.4 billion barrels), Saudi Arabia (266.7 billion barrels), United Arab Emirates (97.8 billion barrels) and Libya (43.7 billion barrels).

Overall, based on those numbers, the United States has about 2 percent of the world’s proven oil reserves.

What's the best way to determine how much oil the United States has?

EIA says you can’t judge a country’s potential to produce oil based on proven reserves alone.

“Proved reserves are an accounting concept that is based on known projects and is not an appropriate measure for judging total resource availability in the long-term,” EIA says on its website. “Over time, numerous additional projects will be developed, which will add to global reserves.”

The potential amount of oil the United States has goes way up when you take into account the country’s technically recoverable oil reserves. That’s an estimate of the total amount of oil, both discovered and undiscovered, a country can produce.

In 2007, the EIA estimated that the United States had 198 billion barrels of technically recoverable oil reserves. That includes 22.8 billion barrels of proven reserves, 60.7 billion barrels of “inferred reserves” and 114.5 billion barrels of undiscovered technically recoverable reserves.

But Cogan warned you shouldn’t base an assessment of a country’s potential to produce oil based solely on technically recoverable reserves either. He said technically recoverable reserves are “highly uncertain and change over time as new information is gained through drilling, production, and technological and managerial development.”

How much oil does the United States consume?

The United States consumes massive amounts of oil. The EIA says the United States consumed 18,771,400 barrels of oil per day in 2009. That’s higher than any other country in the world.

To put that number in perspective, the United State consumes more oil than Africa, the Middle East and Central and South America combined.

In total, the United States consumed 6.85 billion barrels of oil in 2009 and 6.99 billion barrels of oil in 2010. That’s about one-fourth of the world’s oil.

How much oil does the U.S. import?

The U.S. imported 11.7 billion barrels of petroleum a day in 2009, which comes to about 51 percent of the petroleum used in the United States. As of 2009, the country got 21 percent of its oil from Canada, 10 percent from Mexico, 9 percent each from Venezuela and Saudi Arabia and 7 percent from Nigeria.

Andrew Restuccia writes for The Hill, from where this article is adapted. 


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