Monday, October 20th, 2014

Checking the gauge on oil claims

With prices rising at the pump, President Obama took time during a March 11, 2011, press conference to discuss his energy policy.
With prices rising at the pump, President Obama took time during a March 11, 2011, press conference to discuss his energy policy.

In a press conference on March 11, 2011, President Barack Obama talked in length about his energy policy. He talked about boosting domestic oil production, energy conservation and investing in clean energy alternatives. But one thing you didn't hear was President Obama talking about the need for a tax on windfall profits for oil companies.

Back in the summer of 2008, when gas prices were at record highs, then candidate Obama promised just such a tax.  But then gas prices dropped and nothing ever came of it.

Two years ago, we moved this promise to Stalled when Obama failed to include it in his 2010 budget outline. It wasn't in Obama's 2011 budget. And now --even as gas prices are again on the rise -- it's not in his 2012 proposal either.

We've decided to rate this one Promise Broken.

We also checked out several claims Obama made in the press conference about oil production and a decreasing reliance on foreign oil.

"We need to continue to boost domestic production of oil and gas, " Obama said. "Last year, American oil production reached its highest level since 2003. Let me repeat that. 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,"

There's a lot packed into that paragraph, and we wrote three fact-checks out of it.

First,  we took a look at the claim that last year, American oil production reached its highest level since 2003. We found that Obama is right that American oil production is at its highest level since 2003, but it's projected to fall during each of the next two years, making it somewhat problematic to use the number as evidence that domestic oil production is on a healthy trendline. We rated the statement Mostly True.

Next, we looked at the picture specifically in the Gulf of Mexico, and Obama's claim that "oil production from federal waters in the Gulf of Mexico reached an all-time high" in 2010. We found that while Obama's statistic is correct --due in part to permits awarded three or more years earlier -- it ignored a  a downward trend that began in 2010 and that is projected to fall further over at least the next two years. And so we rated Obama’s statement Half True.

Last, we took a look at Obama's claim that "for the first time in more than a decade, imports accounted for less than half of what we consumed." There are two ways to present this statistic. By a mainstream measure of "dependence on foreign oil," U.S. domestic oil production was slightly more than half of oil consumed in the U.S. But that figure includes oil the U.S. exported to other countries. Strictly speaking, imports made up 61 percent of the oil actually consumed in the U.S. last year. So we rated Obama's statement Half True.

And since we're talking oil, we'll throw in this bonus fact-check of Rep. Fred Upton, the Michigan Republican who chairs the influential Energy and Commerce Committee, and Ed Whitfield, the Kentucky Republican who heads the Energy and Power subcommittee, who warned in a joint letter to fellow lawmakers that a bill that would halt the EPA from regulating greenhouse gases would help "stop rising gas prices."

We concluded that the impact of the bill -- if there is an one -- would be years away. And there's no proof that the law would actually stop gas prices from rising. The added regulations now being planned may hamper U.S. refiners, but the international free market could just as easily end up keeping refining costs low. And it’s hardly assured that any changes in refining costs -- up or down -- will influence gasoline prices, which are subject to a wide array of influences. We found their claim False.