There was one thing that the President had right in last night’s Presidential debate. The price of gasoline was low in the beginning of his presidency because the economy was tanking. Other than that, the President was misleading and once again trying to take credit for the work done by others. The industry that the President vilifies time and time again, the oil industry, is to get credit for the historic rise in energy production and the President has not worked with the energy industry but has worked against it.
I have always cringed when uninformed pundits try to use the price of gasoline against the president by using what the cost of it was when the President took office. The price of gas was at $1.86 at the time he took office because the economy was tanking. “When I took office, oil was down because the economy was on the point of collapse." Yet then the President misled with the statement that, “Romney will put the economy back into same mess. We’ve built enough pipelines to wrap around the earth once.” It seems that the president believes that anything private enterprise does it is his doing. The energy industry did not build those pipelines. He did.
Did the Federal government build any pipelines? No! Was the president telling the truth when he said that he built enough pipelines to wrap around the earth? According to the Fact-Checker this “fact” is kind of meaningless — and it’s missing some important context. The circumference of the earth at the equator is just over 24,091 miles. The president is making this claim based on two years of data posted on the website of the Pipeline and Hazardous Material Safety Administration. The data show that from 2008 to 2010, total oil and gas pipelines have increased by 27,899 miles. So that’s certainly circling the globe.
But the total number of pipelines in 2008 was about 2.38 million miles. So that means that Obama’s gain over two years amounts to a little over 1% of that total. That sounds much less impressive than “wrap around the entire Earth.” Indeed, the bulk of Obama’s gain — 19,500 miles — came from gas transmission lines, essentially natural gas piped into homes and buildings. By and large, these pipelines require approvals from states and municipalities, and also the Federal Energy Regulatory Commission, an independent agency. In other words, the President did not approve any pipelines nor did he build any. In fact the only pipeline that he had to make a decision on he denied and that was the Keystone pipeline.
As I have said before, the claims of credit by the president for increased oil production is a disturbing slap in the face to the oil industry. The energy industry knows that this boom of domestic energy production is not because of the president but in spite of him. He claims that his administration has partnered with the oil and gas industry to increase production yet I can’t think of one energy company anywhere that would say that the Obama administration and his EPA directors has made it easier for them to make these historic achievements.
In fact as late as March 3 the president seemed oblivious to our energy abundances when he said in an address on energy, “But we can’t just drill our way out of this problem. While we consume 20% of the world’s oil, we only have 2% of the world’s oil reserves”. Did he say just 2% of the world’s reserves? I mean how can you take credit for producing energy that you did not even know was there?
Oil today is rising once again because of bailout fever despite the fact that the American Petroleum Institute reported a big 3.70 million barrel increase in supply. Even the ratings agencies won’t downgrade Spain because they know that Spain will ask for a bailout. Even Germany seems to suggest that a bailout would be ok with them, so the euro is gapping higher supporting the commodity risk on play.
The American Petroleum Institute also reported that gas inventories fell by 1.8 million barrels and distillates increased by 1.79 million barrels. Brent crude continues its rise against WTI when the spread hit a one year high above $24 a barrel. Euro worries and the fact that the Buzzard field in the North Sea is not back on line and it is not clear when it will come back after maintenance.