A guide to the deceptions involved in each major Republican talking point on oil prices:
1. Obama is to blame for oil prices going up.
Sarah Palin: “[Obama’s] war on domestic oil and gas exploration and production has caused us pain at the pump, endangered our already sluggish economic recovery, and threatened our national security”
John Boehner: “The Obama administration has consistently blocked America’s energy production. They are imposing steep regulations on American businesses that are going to sharply increase the cost of energy.”
This argument is indefensibly false. The rise in the price of oil is driven by two factors. In the short term, it is driven by the instability in the Middle East, an obviously complicated and unpredictable situation that could get better or could get much worse very quickly. As long as our economy depends on oil, the price that we pay at the pump is going to be significantly impacted by the unpredictable events of oil-rich countries.
In the long term, rising oil prices are driven by exponentially increasing demand in developing countries like China and India. The total number of cars on the world’s roads is growing from 400 million in 1990 to 900 million today, and projected to grow to 2 billion by 2030. China especially is already the largest global market for automobiles. Global oil supplies simply cannot keep up with all the new vehicles on the road.
The temporary moratorium on new drilling in the Gulf of Mexico - instituted following what was arguably the largest ecological catastrophe in American history - does slightly reduce the total oil supply. But compared to the enormous growth in global demand, the impact is so trivial that it makes no difference whatsoever on the price that we are currently paying at gas stations. As B.U. economics professor Cutler Cleveland argues, it’s dust in the wind:
On June 8, the International Energy Agency in Paris reduced its estimate of GOM oil production in 2015 by 100,000 to 300,000 barrels per day (bpd). Wood Mackenzie, an industry consulting firm, said 340,000 bpd could be lost by 2015.
The U.S Energy Information Administration (EIA) estimates that world oil production in 2015 will be 89 million bpd. The lost GOM production amounts to 0.1% to 0.4% of global oil production in 2015—dust in the wind.
To their credit, some media sources have been doing what they should do when a politician makes an argument that is demonstrably false – immediately noting that this argument flies in the face of all available evidence. Others have continued to play the he-said, she-said game.
Variant: “Partially” responsible
Many oil industry supporters intuitively understand that this argument is demonstrably false, so they elude to it as much as actually state it. Lisa Murkowski said that Obama is “partially” responsible for higher oil prices, which is true in a sense - the oil crisis is perhaps 30% Middle East unrest, 70% increasing demand, and 0.1% percent Obama’s offshore drilling moratorium.
This America’s Solutions video put together by oil industry lobbyists does an even more impressive job. It contrasts Obama making statements about how we need to freeze drilling in the Gulf with reports about rising oil prices, and seemingly irrelevant ominous storms on the horizon. No argument needed. It’s a perfect visual demonstration of the difference between correspondence and causality.
Steven Chu Variation
Another variant is to make the argument from intention. For example, Haley Barbour attacks Steven Chu for a statement made in 2008: “the Secretary of Energy said in 2008, Secretary [Steven] Chu, then Dr. Chu, said what we really need in the United States to get the cost of gasoline up to where it is in Europe $8 or $9 a gallon.” This of course skips the tedious step of demonstrating any actual relationship between Chu’s statement and an increase in gas prices, which would be difficult, since there isn’t any.
“Backdoor Cap and Trade”
And yes, Republicans are also dragging out the bloated corpse of the climate bill in order to beat it around some more. For example, pro-Global Warming crusader James Inhofe said that “the real problem” was President Barack Obama’s efforts to enact a cap-and-trade plan to curb emissions of greenhouse gases blamed by scientists for global warming.
The most bizarre version of this argument is that the EPA regulations of greenhouse gas emissions are the cause of rising oil prices. This is especially bizarre since, of course, the most relevant EPA regulation of greenhouse gas pollution to oil dependence is the new fuel efficiency standards for cars and trucks, which together are projected to save over 1.8 billion gallons of gasoline and over 900 million metric tons of global warming pollution.
The argument here seems to be:
1) Cap and trade regulations would increase gasoline costs.
2) EPA regulations of global warming pollution are “backdoor cap and trade”.
3) Therefore, EPA regulations of global warming pollution will increase gasoline costs.
2. Increasing offshore drilling will reduce gas prices.
Newt Gingrich: “Your support will help us put the pressure on Congress and the Obama Administration so that we can open up more domestic drilling. This will result in lower gas prices and less reliance on foreign dictators.
This is a claim that makes a certain intuitive economic sense, but only to people who don’t understand the scale of the problem. It is true that, generally, increasing supply of something will reduce the price. But in this case, the size of global oil markets are so huge, and the increase in supply is so small, that the impact of increasing offshore drilling would be, in the word of George W. Bush’s Department of Energy, “insignificant.” In return for putting the entire Atlantic and Pacific Coasts at risk of another disaster, consumers are going to get no benefit whatsoever.
How about drilling in the Arctic National Wildlife Refuge? Because of the nature of the Arctic ecosystem, drilling in the Arctic Wildlife Refuge would have terrible and irreversible effects on the Arctic ecology. In return, the Department of Energy estimates that by 2026, a best case scenario for drilling in the Arctic would slow the increase of gas prices by 3 pennies per gallon.
3. The United States has trillions of barrels of oil available in the Rocky Mountain Region.
Rep. Frank Guinta: “America’s oil shale deposits (primarily located in Wyoming, Colorado and Utah), hold an estimated two trillion barrels of oil, and are the largest unexploited hydrocarbon resource on Earth”
This is technically true, but it avoids mention of the serious ecological and economic limitations on the development of oil shale. Oil shale is a rock that contains a small percentage of kerogen, which can be converted into crude oil through extensive processing. To separate the rock from the kerogen, it first must be heated to over 900 degrees Fahrenheit – giving off toxic chemicals and greenhouse gas pollution in massive quantities. For every barrel of oil produced from oil shale, up to 126 gallons of water have to be used and contaminated. So we could only get those 2 trillion barrels of oil if we were willing and able to pollute 252 trillion gallons of water to help process it.
That’s 50 times more water than flows through the entire Colorado River.
Even though the environmental implications of oil shale would be incalculable, the actual reason we aren’t “tapping” this resource is because it is severely impractical. The oil companies themselves do not think that this resource is worth their investment – at least, not yet. However, as oil prices get higher, people who care about water and air quality in the Southwest should pay increasing attention to efforts to develop oil shale.
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The tragedy of Republican deception on oil prices is not limited to the nihilism of a party that will seize any talking point that is politically useful to damage the President. It’s the absence of any serious plan to deal with the emerging oil crisis. America’s dependence on oil should not be a Republican or Democratic issue. Our dependence on oil impacts concerns that all Americans share, from the quality of our air and water, to economic impact of billions of dollars sent overseas to pay for our oil, to the national security implications of fighting wars in oil rich countries like Iraq and Libya. This should be an area in which both parties compete with each other to present the public with real, sensible solutions to the energy crisis.
There are a few exceptions. Senator Dick Lugar has called for a comprehensive plan to reduce oil dependence by millions of barrels per day, and introduced legislation that contain some good ideas about how to best reduce our dependence on oil. Senator Olympia Snowe, whose constituents in Maine are particularly vulnerable to fluctuations in oil prices because of Maine’s reliance on oil to heat their homes, has co-sponsored legislation that would reduce our consumption of oil. Senator Lamar Alexander has helped promote electric vehicle legislation in Congress.
One hopes that as the oil crisis grows more severe that these legislators will be joined by other Republicans who care about our air and water, the strength of our economy and the impact on our national security to offer real solutions, instead of finger pointing and meaningless talking points.