Gas Prices and the Economy --3

Over the last week, I have written about how the actions of president Obama with regard to oil exploration have helped to drive the price of gasoline up at the pump. This morning brings us two further confirmations of that fact.

1) Anandarko Petroleum announced that it hit a major oil find in the Gulf. Estimates are that 200 million barrels of oil were found in the Heidelberg prospect where the company is drilling. That is an area which would have been drilled nearly two years ago, but for the interferences by Obama with off shore drilling. That means that but for Obama's moratorium on drilling and his subsequent efforts to hamper drilling, just this one prospect would have been producing about $2 billion worth of oil this year. By itself, this would not change American gas prices, but now remember that Obama prevented off shore drilling for well over 700 rig months. If only a third of these found oil, the American oil supply right now could be increased by many hundreds of thousands of barrels every day, enough to lower the price of domestic oil.

2) Robert Gibbs was out with the official Obama campaign position on high oil prices. He tells us that there is nothing that can be done. (Obama will repeat this in a speech later today.) Then comes the clincher why drilling is not the answer: the USA has only 2% of world oil reserves; we cannot drill enough to find the oil we need here at home.

This is a pernicious lie! Gibbs is talking about "proven" reserves only. That means that all of those areas that Obama has removed from drilling are not counted. Further, none of this included unconventional oil, i.e., oil that comes from shale formations. According to the Department of Interior's own figures, there are 21 billion barrels of proven reserves in the USA. That same agency, however, estimates that there are about 134 billion barrels of undiscovered oil in the United States excluding shale oil. We also know that right now shale oil makes up about one-quarter of all the oil produced in the USA. The deposits of oil within shale are huge. Most geologists believe that the Government estimate I just mentioned is low. They point out that in the last fifty years, the USA produced more oil than was contained in the estimate of the total recoverable oil in place when that period began. But, if we stick with the government figures and add about another 40% for the shale oil, we come to 200 billion barrels of oil in the USA. That is enough to meet all of the needs of the USA without any imports for 40 years. If, indeed, there are new discoveries made or further advances in extraction techniques, we have enough oil to last a century.

As I said, Gibbs statement for the Obama campaign is just a lie.