There has been a lot of good analysis of the president’s latest pursuit of alleged manipulation in the oil trading markets. The Council on Foreign Relations’ Blake Clayton makes a number of good points here, and energy blogger Robert Rapier notes the two-way risk inherent in commodities trading, here.
What’s clear is that the president’s concern isn’t new (see 2008, 2009 and 2011), and that White House officials had trouble connecting today’s announcement with anything substantive, as can be seen in a succession of tweets by Yahoo! News’ White House correspondent, Olivier Knox:
“White House punts on whether today's Pres Obama announcement re: oil speculation would have any impact on gas prices. (cont’d)”
“(cont'd) "We would leave that to outside analysts to disentangle,” senior administration officials tells reporters on conference call.”
“White House also refused to describe impact/extent of enforcement of laws re: oil speculation over past year."
“In short: White House won't describe extent of the problem of oil speculation, won't predict impact of today's announcement.”
But we digress. What caught our ear was the president plowing some familiar rhetorical turf, with a couple of demonstrably misleading riffs. Presidential Riff 1:
“The problem is we use more than 20 percent of the world’s oil and we only have 2 percent of the world’s proven oil reserves.”
This is a favorite of the president’s but it’s simply misleading, using a technical classification of one kind of oil reserve to camouflage the fact that the United States is sitting on approximately 200 billion barrels of oil, which the president never mentions, discussed here and here. This line earned “two Pinocchios” from the Washington Post Fact Checker back in March and probably deserves three Pinocchios now, because the White House keeps using it.
Presidential Riff 2:
“Even if we drilled every square inch of this country right now, we’d still have to rely disproportionately on other countries for their oil.”
False. According to the Wood Mackenzie energy consulting firm, if the United States pursued a pro-development strategy that included more domestic drilling – offshore, in remote Alaska and other places – as well as a stronger partnership with Canada (including the Keystone XL pipeline), we could see 100 percent of our liquid fuel needs supplied here and from Canada by 2024.
The real problem here is an administration that continues talking as if the United States is energy poor when in fact we’re energy rich. The president talks about an all-of-the-above approach to energy but has done little to support and enhance oil and natural gas, which supply more than 60 percent of our energy now and will continue to supply about 55 percent of it in 2035.