Let’s talk about a fundamental difference of opinion on the key energy issue of the day.

We say crude oil supply matters – in the context of global-market pricing, which affects fuel prices because the cost of crude accounts for 76 percent of what Americans are paying at the pump. More supply alters the energy equation, exerting downward pressure on crude prices. Energy Economics 101.

The president seems to disagree, saying there’s no “silver bullet,” while suggesting there’s not much that can be done to affect global markets and offer hope to beleaguered consumers. At the same time he tacitly acknowledges market forces work – but only from the side of the equation that reduces demand through efficiency and other measures.

We’re all for greater efficiency, but the president is igno... more »

The White House had a post up last week with some numbers on production of oil and natural gas on America’s public lands and offshore waters. They want the facts to “speak for themselves,” so let’s chart their numbers over the past six years:

The White House says:

"We know that production levels will fluctuate from year-to-year based on market conditions and industry decisions."

Of course the same is true for private lands where production levels are up.

"It also reflects the fact that the nation battled a major oil spill in the Gulf of Mexico in 2010."

An interesting point, given that 2010 production is the peak for oil. And it doesn’t explain the projected declines this year and next:

"Still, the overall trends show a clear picture of rising domestic produc... more »

Yesterday President Obama gave a campaign speech centered around energy policy.  In it he said:

“There’s a problem with a strategy that only relies on drilling and that is, America uses more than 20 percent of the world’s oil.  If we drilled every square inch of this country -- so we went to your house and we went to the National Mall and we put up those rigs everywhere -- we’d still have only 2 percent of the world’s known oil reserves.  Let’s say we miss something -- maybe it’s 3 percent instead of two.  We’re using 20; we have two.  Now, you don’t need to be getting an excellent education at Prince George’s Community College to know that we’ve got a math problem here.  I help out Sasha occasionally with her math homework and I know that if you’ve got two and you’ve got 20, there’... more »

White House Communications Director Dan Pfeiffer put up a blog post last week, fact-checking his boss’ all-of-the-above energy strategy – perhaps because others have found the president’s energy assertions are more myth than fact, that he’s really offering an almost-none-of-the-above approach. Let’s review the White House’s defense.

Pfeiffer:

“The fact is, oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East.”

This important acknowledgement – echoed by Federal Reserve Chairman Ben Bernanke – accurately depicts the reality that crude oil is a global commodity whose pricing is affected by global events. Keep that in mind as we continue.

Pfeiffer:

“The truth i... more »

The New Orleans Times-Picayune reports that permitting in the Gulf of Mexico in the year since the administration’s deepwater drilling moratorium ended is slightly lower than it was in the year before the 2010 Macondo accident:

“Feb. 28, 2011, was the date that the Interior Department approved the first permit for an oil company to drill a new well in more than 500 feet of water after it had implemented new safety rules. In the year since then, there have been 61 permits to drill new wells in more than 500 feet of water issued by the Bureau of Ocean Energy Management, Regulation and Enforcement and its successor agency, the Bureau of Safety and Environmental Enforcement. In the same one-year period from Feb. 28, 2009, to Feb. 27, 2010, the government issued 67 such permits.”

The... more »