Posted by: sonofliberty1787 | March 16, 2011

Rising Energy Cost

Well, after a far too long hiatus I am back in action.  I hope to not go that long without writing again, but to be honest my life is crazy hectic and will probably remain so through mid-May.  Work is crazy, and to be honest when I get home I want to play with my boxer puppy and hang out with my wife.  But enough excuses, I promise I’m not going to be so long in writing next time.

Now for today’s topic, energy and the soaring prices of gasoline.  On Friday President Obama held a press conference.  Not only was Wisconsin and the Republican victory there completely ignored, but he made some pretty outrageous claims.  As gas prices continue to climb, a gallon is over $3.35 here in West Texas so I can’t imagine what it is in California, Obama launched into this diatribe about the increase of drilling he’s implemented and the reduction of foreign imports.  He claimed:

Today we use 7% less oil than we did it in 2005, even as our economy has grown since then.  Partly because our economy as a whole is more efficient, we’re adapting.  We’re producing more oil and we’re importing less.  Our oil production reached its highest level in seven years.  Oil production from federal waters in the Gulf of Mexico reached an all-time high.  For the first time in more than a decade, imports accounted for less than half of what we consumed.  So any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn’t match up with reality.

This is pure mindlessness and to put it bluntly, a lie.  On 8 March 2011 Obama’s Department of Energy’s independent Energy Information Administration released their outlook for projected crude oil production in the Gulf of Mexico.  The slop about being more efficient is tough to prove one way or the other, the economy is in a recession and therefore needs less oil, but it’s possible we waste less.  What is patently false is the claim we’re producing more and importing less.  From the EIA, “Domestic crude oil production, which increased by 150,000 bbl/d in 2010 to 5.51 million bbl/d, declines by 110,000 bbl/d in 2011 and by a further 130,000 bbl/d in 2012.  EIA expects production from the Federal Gulf of Mexico (GOM) to fall by 240,000 bbl/d in 2011 and by a further 200,000 bbl/d in 2012.”  That’s what happens when we shut down drilling in the Gulf.  Even if the foolhardy moratorium were lifted, those rigs have left, many went to Brazil, and with their leaving thousands of jobs disappeared from the Gulf Coast.

As for the decrease in imports, that’s partly the result of less consumption because we are in a recession and using less oil.  It’s also partly due to an increase in domestic production that lasted until 2010.  Again, with the decline of drilling in the Gulf and the lack of new fields being opened in Alaska we’ll see oil imports rise again.  “Liquid fuel net imports, including both crude oil and refined products, fell from 57 percent of total U.S. consumption in 2008 to 49 percent in 2010, primarily because of the decline in consumption during the recession and rising domestic production.  EIA forecasts that liquid fuel net imports will average 9.7 million bbl/d in 2011 and 10.0 million bbl/d in 2012, comprising 50 percent and 52 percent of total consumption, respectively,” claims the EIA.  Again, we’ll see in increase in imports from the 49% it was in 2008 (numbers from when Bush was in the White House), to 52% of total oil consumed in 2012.

So to wrap up.  We did consume less oil for Obama’s first years, but that cannot be contributed to a growing economy.  His own Department of Interior claims the reduction was the result of the recession.  Our reduction of oil use is not the result of a growing economy.  So, either we used more oil, or we’re in a recession.  It cannot be both.  Next, the decrease of imports is now turning the other way and we will continue to import more oil over the next few years.  Finally, domestic production was on the rise; however, that too will begin to sway the other way.  In fact it already has, starting last summer during the Deep Water Horizon disaster.  The rosey numbers Obama is tauting come from policies in place prior to his inauguration, policies he and his EPA are working to reverse.

I will let Natural Resources Committee Chairman Doc Hastings close for me.

The numbers don’t lie—it’s clear that this Administration is taking U.S. energy policy in exactly in the wrong direction. Gas prices are closing in on $4 per gallon and thousands of people are out of work in the Gulf because of the de facto moratorium on drilling permits.  Unemployment is only going to get worse as this Administration’s policies continue to increase the cost of gasoline, which trickles down to every sector of our economy. We need to use our resources to produce American made energy, create good jobs, and insulate ourselves from uncontrollable energy prices spikes.

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