![\"US](\"http:\/\/timscogitorium.com\/tinblog\/wp-content\/uploads\/2012\/03\/US-Oil-Production-300x183.jpg\" "\\"US")
<\/a>Okay, maybe we should mind a little… The GOP’s message<\/a> is that Obama is responsible for high gas prices and he should do something about that.\u00a0 And that something is to “drill, baby, drill<\/a>“.\u00a0 Unfortunately, those damned liberally biased facts stand in stark opposition to the GOP’s message.\u00a0 As the chart on the right shows, oil production under Obama has risen at a substantial rate, and contrasts markedly with the steady decline of production under George Bush.\u00a0 In fact, the number of oil rigs in production in the U.S. has reached a 24-year high, according to oil field services company Baker Hughes. In 2005, domestic production was 1.89 billion barrels. This year, experts say, production is expected to surpass 2 billion barrels.<\/p>\nAnother nail in the coffin of the failure to drill position is the U.S. Energy Information Administration report that the U.S. exported<\/a> 430,000 more barrels of gasoline than it imported for the month of September. This is an historic change, because we’ve been a net importer of gasoline, mostly from Europe, since the 1960s. We are not domestically constrained on gasoline supply.<\/p>\n Another inconvenient truth is U.S. net petroleum imports have fallen<\/a> to about 47% of the nation’s consumption, down from a record 60.3% in 2005, Energy Information Administration statistics show. It’s been 15 years since the nation’s reliance on foreign oil has been this low.<\/p>\n So does Obama deserve all the credit for this?\u00a0 No, absolutely not.\u00a0 While he’s called for ending the $40B in annual subsidies to big oil, so far the money flows unabated.\u00a0 While there was a brief moratorium on deep water drilling after the BP oil spill, that was long ago lifted<\/a>.\u00a0 Obama subsequently opened up drilling in the Arctic<\/a> to the howl of environmentalists, and also agreed to open leases for drilling off the eastern seaboard<\/a>, despite his reputation on the right for shutting down oil exploration.\u00a0 Obama may not be responsible for the boom in production, but it’s not at all clear how you can claim he’s a hindrance to it.\u00a0 There might be a claim that he could do more to spur drilling, but there’s no evidence he’s done anything yet to impede drilling.\u00a0 If anything, his policies lean the other way.<\/p>\n Meanwhile, in reality, the major reasons for increases in domestic oil production lie with recent advances<\/a> in geologic imaging allowing accurate identification of underground oil deposits, as well as the development of new extraction techniques making previously unprofitable wells productive.<\/p>\n Hmmm… domestic production is up, domestic use is down, and gas prices are still rising.\u00a0 That doesn’t sound like the supply & demand model we learned about in school!\u00a0 But wait, I’ve heard rumors that the US is not the only country on the planet.\u00a0 Maybe there are other players here influencing the market.<\/p>\n It turns out that growing industrialized counties like China and India are consuming an ever larger portion of the global oil supply.\u00a0 In aggregate, the global demand is expected to barely keep pace with global production.\u00a0 So there’s minimal excess capacity<\/a> in the market, and that helps keep prices high.\u00a0 Granted, additional production will definitely help this problem.\u00a0 However, if China and India continue growing at their current rate and eventually consume oil at rates approaching what we do in the U.S., the need will far outstrip the supply of oil on the entire globe.\u00a0 So long term, most of us have to find an energy alternative to oil anyway.\u00a0 The only way “Drill, Baby, Drill” solves this problem is if the US becomes entirely oil self-sufficient, and then detaches itself from the global oil markets.\u00a0 And that flies directly in the face of the GOP position on open, free, and unregulated markets.\u00a0 Can you imagine the cries when the law is passed that prevents Exxon from exporting?<\/p>\n And speaking of free markets, oil speculators<\/a> are in no small part responsible for the current price spike.\u00a0 Almost 70% of the current oil commodities market is driven by speculators.\u00a0 Why is speculation driving prices up?\u00a0 Primarily, the speculation that there is an imminent military intervention in Iran that will dramatically impact the delivery of Mid-East oil.\u00a0 Meaning, the increased saber-rattling toward Iran is helping drive prices up by driving speculation of a coming supply crunch.\u00a0 Keep in mind that while Obama has offered stern warnings to Iran, the current GOP Presidential contenders (excluding Ron Paul) have all promised<\/a> to attack Iran<\/a> if they don’t fall in line to U.S. demands.\u00a0 Commodities speculation is fairly unregulated, and it seems highly unlikely the GOP would support such financial regulation.\u00a0 Meanwhile, their militaristic approach to foreign policy exacerbates fears that are driving the free market in the direction they claim to not want it to go.<\/p>\n![\"drilling_gas_prices_chart\"](\"http:\/\/timscogitorium.com\/tinblog\/wp-content\/uploads\/2012\/03\/drilling_gas_prices_chart1-300x286.jpg\" "\\"drilling_gas_prices_chart\\"")
<\/a>Further, there’s no correlation between domestic oil production and gas prices.\u00a0 The chart on the left shows instead that the two numbers seem to roughly track.\u00a0 If we assume (moronically) that correlation is the same as causation, the obvious policy would be to stop domestic production in an effort to bring prices at the pump down.<\/p>\n![\"oil](\"http:\/\/timscogitorium.com\/tinblog\/wp-content\/uploads\/2012\/03\/oil-u.s.-oil-efficiency-improving-300x217.jpg\" "\\"oil")
<\/a>The impact of energy efficiency should also not be underestimated. Not only are our homes, cars, and appliances cleaner and greener, but advances in technology have reduced the need for travel. More of us are telecommuting to work, or using GoToMeeting instead of jumping on a plane.<\/p>\n