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U.S. Rep. Roger Williams, R-Austin, said in a recent newsletter to constituents in his District 25 that Washington is making it harder to produce home-grown energy.
A reader wrote us July 1, 2013, asking us to check this claim: "In January of 2009, a gallon of gasoline cost $1.89. Today, the average cost of a gallon of gasoline is $3.51," Williams wrote in the mailer.
"It doesn’t take an economist to figure out how a gallon of gasoline has increased by $1.62 in four years. The liberal anti-free market policies of the Obama administration discourage the exploration of American sources of energy and hinder production and job growth."
This is a popular theme; we fact-checked Texas Republicans who blamed high gas prices on Obama in 2011 and 2012. Lt. Gov. David Dewhurst earned a Mostly False rating last year for claiming a gallon cost $4.50, and Michael Williams, now the state education commissioner, got a Half True for saying in 2011 that gas prices had gone up $2 under Obama.
Experts told us it’s hard to pin such prices on a president. The national and state-level PolitiFact operations have checked numerous gas-price claims and are fairly consistent in saying presidents can’t correctly be praised or blamed for what you pay at the pump; world gas prices and many other factors are beyond their control.
Graves emailed us historical gas-price data from the federal Energy Information Administration; we also collected data from Gasbuddy.com, which says it collects information from its website and app users, credit card transactions and gas stations, as well as from AAA, a federation of motorist clubs that according to aaa.com surveys U.S. self-serve gas stations for prices.
We were unable to get precise detail on what type of gas and which calendar dates the newsletter referred to. To cover the bases, we looked at prices at the end of December 2008, the month of January 2009 and the end of April 2013 (to be certain the information would have been available for an article written in May). The energy agency had data for several types of gas, so we collected their prices for regular gas and for an average of all grades and formulations. Gasbuddy and AAA only had statistics for regular gas.
Any way we measured, Williams’ comparison held up or got stronger. According to the three sources, regular gas at the end of December 2008 cost between $1.61 and $1.64 and regular gas at the end of April 2013 cost between $3.50 (a penny less than Williams said) and $3.52. The energy agency data showed all grades/all formulations averaged $1.67 a gallon at the end of December 2008 and $3.59 at the end of April 2013.
Williams’ claim had gas jumping $1.62. In the datasets we looked at, gas rose at least $1.87 and at most $1.92. (Gasbuddy, which ranks Austin gas stations’ lowest prices daily at www.austingasprices.com, showed a similar jump in Texas and Austin regular gas, though generally Texas prices ran a dime or more below national prices and Austin’s prices ran 6 cents to 9 cents below Texas around those dates.)
So the congressman’s estimate seems correct -- even conservative. But were liberal policies to blame for the increase?
AAA and Gasbuddy spokesmen and a former Houston Chronicle journalist who covered business, including the oil and gas industry, told us that presidents have little sway over gas prices.
All three said the biggest reason for the $2 jump during Williams’ timeframe was that gas prices -- along with other commodities and, indeed, the global economy -- crashed just before Obama took office.
A decade of gas prices, from Gasbuddy.com
Weekly U.S. prices for a gallon of regular gasoline.
Patrick DeHaan, senior petroleum analyst at Gasbuddy, laid out key dates: With the U.S. economy starting to falter, regular gas hit an all-time high of $4.12 on July 15, 2008. Mega-investment bank Lehman Bros. filed for bankruptcy Sept. 15, 2008, triggering global financial crisis. Gas prices took their biggest drop in history, bottoming out at $1.61 on Dec. 31, 2008. Obama was sworn in Jan. 20, 2009.
"Without a recession," DeHaan told us by phone, "gas prices would probably not have gotten to that low before Obama took office." Politicians’ failure to mention the crash in such comparisons is a "glaring omission," he said. "It just so happened that the timing was not in Obama’s favor."
Prices were going up in the 2000s before the collapse, AAA spokesman Michael Green told us by phone, "primarily due to the strengthening economy in China. As China demanded more petroleum products, it created increased demand around the world and we saw the global price of petroleum increase."
Future prices could drop with increasing North American production, said Loren Steffy, a longtime business journalist who wrote a book on 2010’s BP oil rig disaster in the Gulf. But, he said via email, "I still believe global demand will surpass supply in the long term, so prices will continue to rise over time."
Global crude oil prices, seasonal demand from U.S. drivers and hurricanes all affect what Americans pay at the pump. DeHaan said that refineries have significant annual effects when they conduct maintenance in spring and October and and sell inventory at the end of the year for tax purposes.
So would the president have been able to keep prices from rising as much by altering the policies Williams mentioned?
Obama has long faced Republican criticism for keeping oil reserves in Alaska’s Arctic National Wildlife Reserve off limits, restricting some drilling off Alaska’s shore and in the Gulf of Mexico and rejecting the proposed Keystone XL pipeline expansion that would connect Canadian oil to Texas refineries.
But U.S. oil production has increased dramatically in the past three years, and as we’ve seen, U.S. gas prices still rose overall.
The big U.S. production increases, Green said, have been in North Dakota and Texas shale rock formations that technology has made more accessible. Texas production more than doubled and North Dakota’s nearly tripled in those three years, he said.
"But you have to keep in mind that oil is sold on a global market. So if less oil is being produced somewhere else, then you’re still seeing the same amount of oil being produced in the world and the global price sort of remains unchanged," Green said. "And we have seen some indications that places in the Middle East or Venezuela are not producing as much oil as they did in the past."
Steffy said, "Offshore Alaska is expensive, a huge technological challenge and decades away from production. The Gulf of Mexico is pretty lucrative, but" it might not have a big effect on world supply.
"You could open ANWR and you could push ahead with offshore Alaska, but it would be years or decades before they entered production. So the short-term effect on gas prices would be zero, and the long term would be negligible because while the supply is important from a U.S. standpoint, prices are determined globally and there won't be enough production there to meaningfully lower prices on a global scale."
DeHaan offered similar views, saying, "Alaska doesn’t really matter. Alaska was a gusher a hundred years ago" and Gulf production volume isn’t enough to have a big effect. "If the president is limiting new production in the Gulf, that’s probably having some impact, but I would say it’s only a few dollars a barrel," he said.
"In the grand scheme of things, that’s not your smoking gun."
On Jan. 18, 2012, Obama rejected TransCanada Corp.’s request to build the northern part of the Keystone XL Pipeline extension, from Canada to Nebraska. TransCanada put in a new application now being weighed by the State Department and went ahead with the Texas segment of Keystone XL, which didn’t require presidential permission because it doesn’t cross a U.S. border; it runs from Oklahoma to the Gulf Coast refineries and is nearly complete.
Green said it’s difficult to tell what impact presidential approval would have made, but said, "You would not have seen a dramatic change in gas prices" because "Keystone would be one pipeline of many."
Those other pipelines include the existing Keystone pipe from Canada to Oklahoma, completed in 2011, and Canadian firm Enbridge’s pipeline system, which a July 18, 2013, Reuters news story called "the single largest source of U.S. oil imports."
DeHaan speculated that the Keystone XL extension could actually raise gas prices in the U.S. by giving Canada access to Houston’s ports and thus the world market (Canadian oil prices having been relatively low because its supplies were more or less "landlocked").
Steffy didn’t view that as a big risk, but said he thought Keystone’s biggest effect would be on energy security rather than prices. "The benefit to the U.S. is that we get a steady supply from our strongest ally," he said. "Better Canada than Venezuela."
Williams said Obama policies caused gas prices to rise from $1.89 in 2009 to $3.51 today. He’s got the prices correct, but experts say presidents don’t generally have the ability to make them rise or fall and didn’t see that reversing Alaska, Gulf or Keystone policies would have necessarily kept prices from rising as much.
But the big problem with ascribing this specific jump to Obama is the failure to point out that prices collapsed right before he took office.
Leaving out the economy’s epic, history-making collapse might ordinarily earn such a claim a Pants on Fire rating. Because Williams cited prices accurately, we’ll rate his claim as Mostly False.
Newsletter, "25th District Express," U.S. Rep. Roger Williams, R-Austin, received July 1, 2013
Email interviews, excerpted, with Haley Graves, press secretary, U.S. Rep. Roger Williams, July 16-19, 2013
Energy Information Administration, weekly gas prices, accessed online July 22, 2013
Gasbuddy.com, "Historical Price Charts," accessed online July 22, 2013
Telephone interview with Patrick DeHaan, senior petroleum analyst, Gasbuddy.com, July 19, 2013
Telephone and email interviews, excerpted, with Michael Green, public relations manager, AAA, July 19, 2013
Email interview with Loren Steffy, senior writer, 30 Point Strategies, July 19, 2013
President Barack Obama, "Statement by the President on the Keystone XL Pipeline," Jan. 18, 2012
U.S. Department of State website, "Keystone XL Pipeline project," accessed online July 22, 2013
Beaumont Enterprise news story, "TransCanada pipeline to Nederland to move 700K barrels of oil this year," July 6, 2013
Reuters news story, "U.S. approval of Enbridge pipeline plan irks some oil shippers," July 18, 2013
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