“We’ve got an energy boom going on in this country,” Speaker Boehner said in a September 18th speech, when the national average price of a gallon of regular gasoline was $3.39. “North America is on track to be energy independent in the next five years or so. This is going to mean more growth, yes, but it’s also going to mean lower prices.”
Why? “The boom in U.S. shale oil is perhaps the most important factor,” The Washington Post explains. The “roots of the price collapse go back to 2008 near Cotulla, Texas,” states The Wall Street Journal.
The Economist agrees:
“[T]he main culprits are the oilmen of North Dakota and Texas. Over the past four years, as the price hovered around $110 a barrel, they have set about extracting oil from shale formations previously considered unviable. Their manic drilling—they have completed perhaps 20,000 new wells since 2010, more than ten times Saudi Arabia’s tally—has boosted America’s oil production by a third, to nearly 9m barrels a day (b/d). That is just 1m b/d short of Saudi Arabia’s output.”
“[T]he U.S. is now at around a three-decade high in terms of output,” reports Yahoo Finance.
And the other good news? We have more combined oil, coal and natural gas resources than any other nation on Earth.
Not only has this meant thousands of new jobs, but now, according to The Wall Street Journal, “Many of the world’s top policy makers are rewriting their economic forecasts for the U.S., Europe, Japan and elsewhere, betting plummeting oil prices will lead to an overall boost in the global economy by delivering a windfall to consumers and manufacturers.”
The Obama administration apparently shares this view. “[W]e believe that falling gas prices are, as a general matter, pretty good for the economy,” Press Secretary Josh Earnest said last week.
This contrasts, however, with President Obama’s long-held positions. He’s on record supporting increasing gas prices in order to reduce Americans’ dependence on oil. And when the foundations for today’s lower prices were being laid seven and five and three years ago in states like North Dakota, Montana, and Texas, Barack Obama was insisting that increased production would never result in lower prices:
- “It would be nice if we could produce our way out of this problem, but it's just not possible. … [C]onsumers need to get serious about buying hybrid cars[.]” (2/28/06)
- “[W]e should just replace the use of oil altogether as America's fuel of choice.” (5/11/06)
- “[T]he Republican leadership in the Senate believes we can solve our energy problems by just drilling more. That's not only dishonest – it’s a disservice to our constituents …. [The Republicans’] bill continues to lull the American people into thinking that we can drill our way out of our energy problems. We can't[.]” (8/1/06)
- “[M]oving away from an oil economy is a major challenge that will require a sustained national commitment.” (9/20/06)
- “The hard truth is the only way to, over the long term, reduce gas prices is to reduce demand.” Later, to an audience member: “What kind of car do you drive? An Escalade!? This is what I’m talking about [as the problem] right here.” (3/22/08)
- “We should also be investing in new technologies so we can replace the internal combustible engine, which has served us well, but it's time for us to move on, because we want to get rid of fossil fuels.” (4/1/08)
- “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times…” (Agence France-Presse, 5/19/08)
- “Long-term, though, the only way we're going to deal with these high gas prices is if we change how we consume oil.” Then, when asked if high gas prices could help America to transition to alternatives: “I think that I would have preferred a gradual adjustment.” (CNBC, 6/10/08)
- “Believe me, if I thought there was any evidence at all that drilling could save people money … by this summer or this year or even the next few years, I would consider it. But it won’t.” (6/20/08)
- “What I will not do, and this has always been my position, is to support a plan that suggests this drilling is the answer to our energy problems. … It won't drop prices in this administration or in the next administration or in the administration after that.” (CNN, 8/2/08)
- “[T]hat’s part of the reason you never heard me say, ‘Drill, baby, drill’ – because we can’t drill our way out of the problem.” (5/27/10)
- “[W]e can’t just drill our way out of the problem.” (5/6/11)
- “Now, some politicians always see [high gas prices] as a political opportunity. … [T]hey’re already dusting off their three-point plans for $2 gas. I’ll save you the suspense: Step one is drill, step two is drill, and step three is keep drilling. … Well the American people aren’t stupid. … You know there are no quick fixes to this problem, and you know we can’t just drill our way to lower gas prices.” (Tampa Bay Times, 2/23/12)
- “Anyone who tells you we can drill our way out of this problem doesn't know what they're talking about, or isn't telling you the truth.” (Reuters, 3/1/12)
- “[W]hy is it that every year we hear the same story about how we’re going to have $2 gas, or $1.50 gas, or whatever price they come up with, if we would just drill for more oil? That’s the solution that you always hear. Prices will immediately come down and all our problems will go away – like magic. … We can't simply drill our way out of the problem.” (3/22/12)
And it wasn’t just our current president. Most leading Democrats have told Americans the same thing:
- House Minority Leader Nancy Pelosi (D-CA): “We cannot drill our way to energy independence.” (The Hill, 5/24/06) And again: “We cannot drill our way out of this.” (Reuters, 6/12/08)
- Senate Minority Leader Harry Reid (D-NV): “[W]e cannot drill our way out of this problem.” (6/18/08)
- President Obama’s Interior Secretary, Ken Salazar: “Almost every day, you have someone putting out a three point plan for two dollar gasoline …. It’s a divide between the real energy world and the imagined energy world. To be sure, the imagined energy world is …. a place where you hear cries of ‘drill, drill, drill[.]’ … The good news is that this imagined energy world is actually very small. I think you can actually find its edge when you walk out of the [Republican-controlled] House of Representatives. … At the end of the day, we all know that we cannot drill our way to energy independence.” (The National Press Club, 4/24/12)
Remember that the next time you buy gas for $1.76 in Missouri or $1.98 in Ohio or $2.00 in Virginia. President Obama was wrong. Democrats were wrong. They were all wrong. Wrong, wrong, wrong.
But they still think they know best, and President Obama is about to unleash a storm of regulations aimed at stifling this progress in its tracks, according to The Wall Street Journal:
"The Obama administration is planning to release in the coming months a series of regulations on the oil and natural gas industry, a response to the nation’s energy boom that also is aimed at burnishing President Barack Obama ’s environmental legacy in his final two years. …
"The repercussions for the industry could be higher operating costs and fewer incentives to drill on public lands. Mr. Obama and his environmental backers say new regulations are needed to address the impacts of the surge in oil and gas drilling and production. …
"Oil and gas production on public [government] lands has declined 16% and 24%, respectively, between 2010 and 2013, according to EIA data."
President Obama is not a friend of cheap, affordable gasoline. His words and his deeds prove it. He says he will veto the Keystone XL pipeline project, and who can forget his pick for Energy Secretary, Steven Chu, openly musing that “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe”? At the time, that meant $7-9 per gallon.
It’s true that the price of gas will always fluctuate based on supply and demand and many other factors. We may see prices go back up. But it’s undeniable that increased American energy production in recent years has resulted in lower gasoline prices now, just as Republicans said it would.
President Obama now says cheap gas won’t last. That certainly may be true – if he has anything to do with it.