On Energy, Obama Lies With Statistics

The Obama administration has been reading the polls, and is panicked by the implications of $4 a gallon gasoline. Consequently, President Obama gave a speech today in which he trotted out a “Blueprint For A Secure Energy Future.” We will have more to say about the administration’s proposals, which I don’t think contain anything new, but for the moment, I want to note the dishonesty with which President Obama introduced them.
Early in his remarks, Obama provided context from our recent history:

Now, here’s the thing — we have been down this road before. Remember, it was just three years ago that gas prices topped $4 a gallon.  I remember because I was in the middle of a presidential campaign.  Working folks certainly remember because it hit a lot of people pretty hard.  And because we were at the height of political season, you had all kinds of slogans and gimmicks and outraged politicians — they were waving their three-point plans for $2 a gallon gas.  You remember that — “drill, baby, drill”
– and we were going through all that.  (Laughter.)  And none of it was really going to do anything to solve the problem.  There was a lot of hue and cry, a lot of fulminating and hand-wringing, but nothing actually happened.  Imagine that in Washington.  (Laughter.) 

Talk about chutzpah! “Nothing actually happened”–Obama is right about that–but the reason nothing happened is that he won the election. Guided by a Secretary of Energy whose stated goal is to increase the price of gasoline, Obama deliberately pursued policies that reduced domestic oil production below the levels that had been projected, based on projects already in the pipeline. Thomas Pyle, president of the Institute for Energy Research, said today:

The Obama anti-energy agenda has decreased expected production in the Gulf of Mexico by 360,000 barrels of oil per day. By withholding the necessary permits to produce energy in Alaska, the Trans Alaska Pipeline System is only filled at one third of its capacity. The Outer Continental Shelf holds at least 80 billion barrels of oil– four times as much as the ‘two percent’ the President says we have – but the Obama Administration either refuses to offer those resources for lease or refuses to grant permits to explore for and produce these resources.

Here is one thing Obama got right:

When gas prices finally did fall, it was mostly because the global recession had led to less demand for oil. 

That is exactly right. And when demand started rising again, prices rose with the demand, and the administration’s anti-energy policies were exposed. Hence the current panic.
Obama continued with another favorite liberal talking point:

Right now the industry holds tens of millions of acres of leases where they’re not producing a single drop.  They’re just sitting on supplies of American energy that are ready to be tapped. 

Think about it: does Obama seriously expect anyone to believe that there are valuable leases containing substantial amounts of recoverable oil, which the oil companies are declining to develop out of…what? Sloth? Perversity?
In fact, there are a number of reasons why oil is not developed from a particular leased area. The most common is that there didn’t turn out to be enough recoverable oil at current and anticipated prices to be worth the enormous expense entailed by petroleum recovery. Oil companies take leases, they explore, and a large majority of the time they strike out.
There are other reasons, too, why leased areas remain undeveloped. As Thomas Pyle explained:

President Obama wants us to believe that oil companies are hoarding resources and sitting on leases for profit. But we’ve shown numerous times that not every lease holds oil or gas. On top of that, the Obama Administration is preventing eager companies from developing these resources by withholding permits. Not letting the facts get in his way, the President wants to force American companies to pay higher prices for leases, which will undoubtedly be passed on to the consumer and will result in American jobs going overseas.

It takes more than a lease to develop petroleum; it also takes permits and, often, pipelines and other facilities that themselves require permits. The one thing we can say for sure is that there are zero profitable leases that the oil companies are failing to develop because they are too lazy to drill.
Now we come to the Big Lie. What the Democrats want to do is subsidize endless “green” energy boondoggles. They want to pass out billions upon billions of dollars to their political allies in order to buy votes and financial support in future elections. In order to provide cover for this corrupt enterprise, they need to convince the American public that our efficient energy resources are inadequate; therefore, we have no choice but to resort to less efficient sources of energy. Obama repeated the Big Lie today:

I give out this statistic all the time, and forgive me for repeating it again:  America holds about 2 percent of the world’s proven oil reserves.  What that means is, is that even if we drilled every drop of oil out of every single one of the reserves that we possess — offshore and onshore — it still wouldn’t be enough to meet our long-term needs.  We consume about 25 percent of the world’s oil.  We only have 2 percent of the reserves.  Even if we doubled U.S. oil production, we’re still really short. 

This is a perfect example of lying with statistics. Obama knows that most people assume that “proven oil reserves” equals oil known to be in the ground. And, in fact, in most countries around the world, that is more or less what it does mean. In Saudi Arabia, for example, “proven oil reserves” are whatever the government announces they are.
But in the United States, “proven oil reserves” is a legal term, not a scientific term. It is defined by the Securities and Exchange Commission. We wrote about this in detail in Obama’s Long Nose On Energy. This is the definition, unique to United States law, of “proven oil reserves:”

Proved reserves. The quantities of hydrocarbons estimated with reasonable certainty to be commercially recoverable from known accumulations under current economic conditions, operating methods, and government regulations. Current economic conditions include prices and costs prevailing at the time of the estimate. Estimates of proved reserves do not include reserves appreciation.

The definition is in part economic; every time the price of oil rises, our “proved reserves” rise, too; likewise when the price falls. Most important, however, is that “proven oil reserves” only counts the petroleum that is available for development under current government regulations. So, to take two obvious examples, the petroleum in ANWR is not included in our “proven oil reserves,” even though the petroleum there is known to be vast, nor is the offshore petroleum in those areas–the large majority–where drilling is not permitted by current law. It is not nature, but Barack Obama and Congress that are limiting America’s energy resources.
It is disgraceful that the President of the United States is willing to deliberately mislead the American people in order to justify billions, if not trillions, of dollars in wasteful, politically-motivated boondoggles.

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