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As Americans continue to worry about environmental damage from the oil spill in the Gulf of Mexico, Sen. Orrin Hatch, R-Utah, is raising another concern -- that the federal government might overreact by putting up excessive obstacles to drilling in the Gulf.
"That would be the stupidest thing they can do," Hatch told interviewer Neil Cavuto in a June 16, 2010, appearance on the Fox Business Network. "The best thing we can do is keep BP going so that they can make these payments (to compensate people hurt by the spill). And let me tell you something. To put a moratorium on all of the gulf and all of the drilling down there when we get 30 percent of our oil from the Gulf? Where are these rigs going to go? They are going to leave our area, where we won't be able to get them back except at exorbitant prices, and they're going to go elsewhere in the world, and at the same time that they are shutting down exploration in the gulf that has worked very, very well up until this incident."
What caught our eye was Hatch's comment that "we get 30 percent of our oil from the Gulf." It's becoming something of a talking point for Republicans who express concern that the Obama administration may curb offshore drilling. For instance, Mississippi Gov. Haley Barbour, a Republican, cited the same statistic in a June 20, 2010, appearance on NBC's Meet the Press.
So we decided to check whether Hatch's statistic is accurate.
First, some background. On May 27, 2010, a few weeks after the Deepwater Horizon oil rig caught fire and sank, President Barack Obama ordered a six-month moratorium on deepwater drilling -- that is, a six-month halt to new drilling projects in water depths of 500 feet or greater. (Oil production currently under way that doesn't involve new drilling was exempt from the moratorium.) Those who see oil as an economic linchpin of the Gulf Coast region have warned that if the government heightens regulation too much, oil companies will simply relocate to other countries that have lower regulatory standards, leaving Gulf Coast workers and their families in the lurch.
Under this logic, it would be a substantial economic wallop if the government were to place at risk an industry that provides 30 percent of the nation's oil needs. But the numbers don't necessarily back up what Hatch says.
In the wake of the spill, the Energy Information Administration -- the nonpartisan Energy Department office that publishes the most complete set of statistics on U.S. energy use -- released a Gulf of Mexico fact sheet. Using the fact sheet, we were able to pinpoint what appears to be the source of Hatch's 30 percent figure. It refers to the Gulf of Mexico's "offshore share of U.S. crude oil production." In other words, 30 percent of the crude oil produced in the United States in 2009 came from the Gulf.
Now, you could use that statistic to justify Hatch's statement that "we get 30 percent of our oil from the Gulf." But we don't think that interpretation of his statement is the only one -- or even the best one. If Hatch had wanted to communicate that, he could have said that "30 percent of the oil we produce in the U.S. comes from the Gulf."
Instead, we think that an equally fair -- if not more fair -- reading of his statement is that 30 percent of the oil used in the United States comes from the Gulf. And statistically speaking, that leads to quite a different answer, thanks to the major role played -- for better or for worse -- by imported oil in the nation's petroleum supply.
The same EIA fact sheet shows that offshore crude oil production in the Gulf of Mexico accounts for 8 percent of total U.S. liquid fuels consumed. (Slightly over half of the liquid fuels used in the U.S. are imported, and slightly under half are produced domestically.)
We'll acknowledge that even at 8 percent, Gulf Coast offshore oil production accounts for a significant share of U.S. consumption. If that spigot were shut off entirely, the economy would surely suffer. But the current moratorium does not involve shutting off the spigot entirely, only delaying new drilling projects for six months to grapple with the consequences of a disaster of historic proportions.
More directly relevant for judging Hatch's statement, we think a reasonable person would conclude that the senator was saying that 30 percent of the oil used in the United States comes from the Gulf -- a comment that overstates the actual share by nearly a factor of four. That's not a trivial difference when Hatch is using the statistic to back up his contention that Gulf oil is simply too vital to the economy to overregulate. So we rate Hatch's comment Barely True.
Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
Orrin Hatch, interview with Neil Cavuto on Fox Business Network, June 16, 2010 (CQ subscribers only)
Energy Information Administration, "Gulf of Mexico Fact Sheet ," accessed June 18, 2010
PolitiFact, "Obama says he issued a six-month moratorium on deepwater oil drilling," June 16, 2010
Haley Barbour, comments on Meet the Press, June 20, 2010
E-mail interview with Jonathan Cogan, spokesman for the Energy Information Administration, June 18, 2010
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