Tuesday, October 21st, 2014
Half-True
Obama
"Oil production from federal waters in the Gulf of Mexico reached an all-time high" in 2010.

Barack Obama on Friday, March 11th, 2011 in a press conference

Barack Obama says Gulf oil production hit record level in 2010

In his press conference on March 11, 2011, President Barack Obama talked up U.S. oil production against a backdrop of higher prices at the pump.
   
"We need to continue to boost domestic production of oil and gas, "he 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,"

In this item, we’ll check the second bit of evidence to support his contention that his administration hasn’t "shut down" oil production -- that "oil production from federal waters in the Gulf of Mexico reached an all-time high."

As we did in our other fact-checks of the president’s press conference comments, we turned to the Energy Information Administration, the federal government’s official office for energy statistics. Since Obama said "oil production," we will only look at oil, rather than natural gas or other petroleum products, and since he said, "federal waters," we will ignore production from state waters.

The agency’s data goes back to 1981. Here are the annual figures for Gulf production in barrels per day.

1981: 719,000
1982: 786,000
1983: 876,000
1984: 956,000
1985: 941,000
1986: 960,000
1987: 892,000
1988: 818,000
1989: 764,000
1990: 739,000
1991: 799,000
1992: 822,000
1993: 825,000
1994: 860,000
1995: 943,000
1996: 1,021,000
1997: 1,129,000
1998: 1,228,000
1999: 1,354,000
2000: 1,430,000
2001: 1,536,000
2002: 1,556,000
2003: 1,559,000
2004: 1,453,000
2005: 1,282,000
2006: 1,299,000
2007: 1,277,000
2008: 1,152,000
2009: 1,559,000
2010: 1,640,000 (estimate)

So the president is right -- 2010 was the highest ever. But some critics say that isn’t the whole story.

After the Deepwater Horizon oil spill began in April  2010, the federal government allowed existing wells in the Gulf to continue production but imposed a moratorium on new drilling. While that moratorium has now been lifted, it slowed production, as output began to decrease at old wells and new ones were not on line yet to pick up the slack. Critics say the administration has slow-walked new applications -- a perception Obama challenged  at the press conference by arguing that his administration is simply demanding "common-sense standards like proving that companies can actually contain an underwater spill."

We won’t assess whether the permit approval rate is slower than it ought to be, but the oil-production numbers do tell a story.

In May 2010, production in the Gulf peaked and then continued to decline for the rest of the year. And the Energy Information Agency expects this decline to continue for at least two years more -- by about 240,000 barrels per day in 2011 and by an additional 200,000 barrels per day in 2012.

"Since there is a lag time from the time an exploration permit is approved to the time of actual production, and since only a handful of permits for new wells have been granted since April of 2010, it is likely that Gulf of Mexico production will continue to be hit hard in 2012 and beyond," wrote Kyle Isakower, the vice president of regulatory and economic policy at the American Petroleum Institute, in a recent blog post.

In an interview with PolitiFact, Isakower added that "while the administration is correct" in its statistics, EIA found that "Gulf production peaked in May of 2010, due in large part to permits awarded three or more years earlier, and has been decreasing ever since. This matters because markets don’t look backward, they look forward."

We think that’s a fair point. Obama is indeed correct about the record-high levels of Gulf oil production in 2010. However, he ignores a downward trend that began in 2010 and that is projected to fall further over at least the next two years. We think it’s problematic to use the record-setting statistic to buttress the notion that Gulf oil production is on a healthy trendline. On balance, we rate Obama’s statement Half True.