Climate

Charts Reveal Drill, Baby, Drill Fails to Stop High Oil Prices

The “good” news:  U.S oil production is at a 10 year high. The inevitable result: No significant impact on oil prices.

Now, for Fox News, this means Obama’s policies are to blame. But as we reported back in March, Rupert Murdoch’s Wall Street Journal and the Koch-Fueled Cato Institute agree: “It’s Not Obama’s Fault That Crude Oil Prices Have Increased”:

WSJ: “U.S. gasoline prices, like prices throughout the advanced economies, are determined by global market forces. It is hard to see how Mr. Obama’s policies can be blamed.”

Cato: “Is President Obama responsible for spiraling price of gasoline? Republicans say yes, but the facts say no.”

For more, see “20 Experts Who Say Drilling Won’t Lower Gas Prices,” which notes:

In a pretty impressive act of journalism, the Associated Press recently conducted a “statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production.” The result: “No statistical correlation between how much oil comes out of U.S. wells and the price at the pump.”

Here are recent oil prices:

Note how oil prices surged to record levels under Bush.

Obama has overseen a massive expansion of drilling — which has won him no friends on the left or right. Go figure!

Last year, the Wall Street Journal had the amazing chart on the right. “The figure reflects a huge surge in U.S. oil drilling, up nearly 60% in the past year and the highest total since at least 1987, when oil services company  Baker Hughes Inc. began keeping track,” notes the WSJ.

The fact is oil prices soared again despite both record drilling and the highest domestic oil production levels in almost a decade.  It should be obvious that yet more drilling can’t have any significant impact on oil prices — particularly since the U.S. Energy Information Administration has been making that precise point for years now (see EIA: Full offshore drilling will not lower gasoline prices at all in 2020 and only 3 cents in 2030!).

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16 Responses to Charts Reveal Drill, Baby, Drill Fails to Stop High Oil Prices

  1. h4x354x0r says:

    We produce less than 6M bbl/day. We consume well over 3 times that much. It’s not hard to figure out why it doesn’t make a difference.

  2. 1gardener says:

    Wow what oil hogs we are! We clearly need to reduce our consumption don’t we.

  3. NJP1 says:

    its just called running faster to stand still

  4. All new oil is expensive oil.

    Great article Joe. Good to see a heavy hitter towing this line ;).

  5. Earl Richards says:

    Google the “$2.5 Trillion Oil Scam – slideshare” and google the “Global Oil Scam.” The US is a victim of this scam. Purchase solar panels and electric cars.

  6. Ozonator says:

    Gas prices used to reflect supply and demand. And when unleaded was introduced, the price actually went down without the added expense of tetraethyl lead and when stations went to self-service. The international pricing model now reflects the price “fixing” of the Benton Harbor – St. Joseph, Michigan gas station bottleneck of picking off unwary travelers, tourists, and Chicago businesses. It is no wonder why some Nigerians steal oil and have backyard refineries with occasional “upsets”. Iran still has to import gasoline. And, extremist media outlets from Coast2Coast4Payolas to Looter Limbaughs appear to get a hidden Romney tax return bonus for mentioning drops in electric car sales.

  7. Mulga Mumblebrain says:

    ‘The American Way of Life is not up for negotiation!’. All others may starve, quietly.

  8. Mulga Mumblebrain says:

    The real scam is the trading of oil in US dollars. The real prime reason that Iraq and Libya were obliterated is that they sought to replace the US dollar in their hydro-carbon trade.

  9. Ozonator says:

    However, going against being bred-with for free spills from the EssoKochs, “N.Korea Demands ‘Rip-off Fee’ for Gas Pipeline” (english.chosun.com, 10/4/12).

  10. Zarrakan says:

    What did you think would happen? Any “savings” would immediately be given to the rich people who don’t need it, and gas prices will continue to climb. DUH. Vote Democrat is you want to get away from exploitative oil companies. What the Republicans want is the complete destruction/subjugation of the non-rich to give everything to RICH WHITE YOUNG STRAIGHT MEN. Unemployment will do nothing but increase wherever Republicans have power. I made a video about unemployment, and how we can fix it. It’s at my YouTube channel Zarrakan, and here’s the name:
    2012 6 5 ZOC Job Pyramid
    http://www.youtube.com/watch?v=l6qjvLSCtpc
    Watch it, share it, and join the fight against those who want to kill all of us with destructive social policies.

  11. Greatgrandma Kat says:

    The reasons behind higher gas prices are pretty clear if you care to look for them. They reside in plain sight and plain language in any number of books, articals, and even on TV. More people with rising standards of living, in more countries that can now afford all the things that as of this moment are produced by the energy supplied by oil, coal and natural gas. All are non-renewable resouces, since we have already drilled and minned the easiest and least costly of those deposits, those now and in the future are smaller and more costly. You can not add more demand on top of these facts, add in speculation in the oil market and keep us here in the good ol US of A driving our cars at Good Old Day’s prices. The pipe dream of energy independance in a global economy is rubbish, you can’t have it both ways. If we keep on the way we are going it won’t matter anyway, we will have much bigger problems than the price of oil out of the barrel or gas at the pump when in the next few years we lose any chance of a livable climate and over half the population of the planet is starving.

  12. Paul Klinkman says:

    Before the 2008 presidential elections, the Koch brothers rented six oil tankers, filled them and parked them for months in the Gulf of Suez. Oil prices rose.

    Given that the Koch brothers vowed to spend $200 million on this election, why would anyone imagine that they didn’t rent six oil tankers in 2012 too?

    I’m sorry, Joe, but this story strikes me as having a presumptive answer. It’s probably a politically motivated price increase.

  13. Chris says:

    Nothing in this article mentions a figure on the price per barrel of drilling the oil. Demand for oil has increased, but technology is just barely keeping up. Prices will not drop just because more oil is drilled. Prices will drop, however, when oil that costs less per barrel to extract is drilled. Considering that President Obama has decreased the number of permits issued for drilling on publicly owned land by roughly half and suspended many offshore operations within the jurisdiction of the U.S., drilling companies have had to make larger investments to drill in harder-to-reach areas.

    Remember the Deepwater Horizon? That platform was drilling for oil that was 35,000 feet below the ocean floor in open water more than 4,000 feet in depth. In contrast, drilling operations in areas like the Alaskan National Wildlife Reserve would not 1) be on open water and 2) be drilling seven miles down.

    Drilling for oil doesn’t bring the price down. Cheaper drilling for oil brings the price down.

  14. Beaugrand says:

    The reason we import oil is that imported oil is cheaper to produce than domestic, pure and simple. It doesn’t matter how many oil wells you drill in the US, it’s still going to be 1.) scarcer, and 2.) more expensive, than imported oil.

    And most of the oil we import is from Canada.

  15. Beaugrand says:

    If you are serious about lowering oil prices, convince all the conservative politicians in the country to announce that they support diplomacy rather than military intervention to solve global problems. On the other hand, every time a white-hair conservative member of Congress spouts off about bombing other countries, it’s good for a $0.30 hike in gas prices.

  16. Holly McLachlan says:

    Chris:
    BP’s Macondo Prospect well was only a little over 18,000 feet deep, in ~5,000′ of water — and they intended to produce from that depth. While your argument in re cheaper oil is fundamentally correct, the ANWR is not a “cheap” drilling environment. The harsh weather, pack ice and remoteness of the Alaskan Arctic all add up to make it likely just as expensive as drilling deep offshore Gulf prospects.
    The point Romm has made elsewhere in his blog is that we don’t have much cheap oil left. Oil prospects in the US (or US waters) are invariably expensive plays.