Right-wing talking points about oil prices are nonsense

Truth and right-wing talking points generally go together like oil and water. Especially when the talking points are actually about oil. Because like most other right-wing talking points, the most common ones simply are not true.

Americans are getting gouged by high gas prices.

False.

From CNNMoney:

Relatively low taxes have kept pump prices far below most other developed nations, which some say is precisely why the current runup is so painful.
Despite daily headlines bemoaning record gas prices, the U.S. is actually one of the cheaper places to fill up in the world.

Out of 155 countries surveyed, U.S. gas prices were the 45th cheapest, according to a recent study from AIRINC, a research firm that tracks cost of living data.

The difference is staggering. As of late March, U.S. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon across much of Europe.


So why does a price rise at the pump hurt Americans? Because we use more.

On a per capita basis, Americans use three times more oil than Europeans, he said. That means Americans are more exposed to rising gas prices than their counterparts across the Atlantic.


"There has not been a single new refinery built in America since 1976."


No one's offering to build any. No profit in it.

From Carol Browner, then administrator of the Environmental Protection Agency and Henry Waxman in 2000 during the Potential Energy Crisis in the Winter of 2000 hearings:

Mr. Waxman. Ms. Browner, do you know how many applications EPA has received since the early 1980's to build new refineries?

Ms. Browner. For brand new ground-up?

Mr. Waxman. Brand new refineries.

Ms. Browner. We may have gotten one in 25 years. One.


Via TomPaine.com:

Indeed, at a Senate hearing last year, BP1s chief executive officer explained that "[refinery] margins over the last 10 to 15 years have not been high enough on average to justify building a new refinery." And in a recent closed-door briefing with congressional aides, an Exxon Mobil official said that company foresees no need to build new refineries at least through the year 2030.


Environmentalists won't let us drill in Alaska National Wildlife Refuge (ANWR).

So?

From the National Resource Defense Council:

What would America gain by allowing heavy industry into the refuge? Very little. Oil from the refuge would hardly make a dent in our dependence on foreign imports -- leaving our economy and way of life just as exposed to wild swings in worldwide oil prices and supply as it is today. The truth is, we simply can't drill our way to energy independence.

Although drilling proponents often say there are 16 billion barrels of oil under the refuge's coastal plain, the U.S. Geological Service's estimate of the amount that could be recovered economically -- that is, the amount likely to be profitably extracted and sold -- represents less than a year's U.S. supply.

It would take 10 years for any Arctic Refuge oil to reach the market, and even when production peaks -- in the distant year of 2027 -- the refuge would produce a paltry 1 or 2 percent of Americans' daily consumption. Whatever oil the refuge might produce is simply irrelevant to the larger issue of meeting America's future energy needs.


We're not allowed to drill for oil anywhere in the U.S.

False.

From CommodityOnline.com:

Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year – with a glaring lack of results.


From Wikipedia:
No oil fields of similar size to the ANS reserves have been found in the US since 1970. With over 2.3 million wells having been drilled in the US since 1949,[43] there are very few unexplored areas left where another supergiant oil field is likely to be found.


From WorldOil.com:

The number of US producing oil wells grew slightly by 0.5% in 2006 to 500,785 wells from its 498,454 total well count for 2005, as reported by state agencies and estimated by World Oil. This is the first gain in oil producers since 1991's well count of 610,204.

The US gained 2,331 net wells in the past year. Significant gains occurred in four states: Pennsylvania, California, Texas and Colorado. Modest gains were seen in 10 other states. Thirteen states and the Federal OCS sustained losses, while three states had no change in their well count.

As was true last year, seven states—Texas, Oklahoma, California, Kansas, Ohio, New Mexico and Louisiana—hold the largest number of producing wells. These states have 77% of the US producing oil wells.

Texas continues with the largest well count at 144,424, up 1,219 wells, a 0.9% increase from last year's 143,205 well count. District 9 expanded its producers the most, increasing its count by 539 to 19,727 producers. Districts 5, 7C, 8, 8A and 10 also had triple-digit increases: 211, 314, 309, 529 and 397 respectively. District 1 again had the largest reduction, off 871 wells.


We need to cut taxes on gas.

This would be like trying to cure alcoholics by giving them more to drink.

For example, Europe's stronger social safety net, including cheaper health care and higher education, is paid for partly through gas taxes. ...

... Revenues from Europe's high gas taxes are used to fund a variety of things. One thing they have built is better public transportation, said Peter Tertzakian, chief energy economist at ARC Financial, a Calgary-based private equity firm. ...

... There is some evidence Europe's high gas taxes have capped its oil consumption.
Oil use in the United Kingdom has basically stayed flat from 1980 to now, while in France it's dropped 17%, according to figures from the Energy Information Administration.

In the U.S., meanwhile, oil use is up 21% over the same period, although the country has added more people and seen its economy grow slightly faster.
Americans have taken advantage of cheap gas prices to do other things - like buy bigger cars and bigger houses further away from city centers, said Schipper.


OPEC is screwing us.

False.

From the Associated Press:

The Organization of Petroleum Exporting Countries — which supplies about 40 percent of the world's crude — insists it's supplying more than enough oil.
Instead, many observers blame speculative traders for bidding up the price as a hedge against inflation and as protection from the sinking U.S. dollar. Some see that as evidence of a bubble.

It's also becoming harder and more expensive for oil companies to find and tap new petroleum reserves — a troublesome scenario given forecasts that the world's energy needs will escalate by more than 50 percent in the next two decades.


And, by the way, the No. 1 exporter of oil to the U.S. is Canada. No. 3 is Mexico.


So why are prices at the pump rising in the U.S.? A weak dollar, oil companies that are interested only in the bottom line, speculators . That's about it.

From Reuters:

[OPEC], which pumps more than a third of the world's oil, has long argued high oil prices do not reflect oil market fundamentals and are being driven by speculation.

Influential Saudi Oil Minister Ali al-Naimi reiterated the view in remarks published on Friday, saying speculation was behind triple-digit oil and made it impossible for any organisation to control price movements.

"Today there is no link between oil (market) fundamentals and prices," he told Moroccan newspaper Asharq al-Awast.

"The duty of oil exporters is to make sure that fundamentals are healthy," said Naimi. "If these fundamentals were stable and fulfil market needs, then there is no need to raise or decrease production," he added.


Not that any of this matters, of course. You'll still hear everyone from President Bush on down spouting these talking points. Facts never get in the way of a good right-wing attack, after all.

--WKW


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