You’d think that by the year 2022 the general public would have learned how global economics works, but here we are in the 21st century and folks keep blaming the President of the United States (POTUS) for the price of gasoline. Social media is the main reason for the persistence of bad ideas like this, and here I’ll take down just one of them that represents a whole bunch of bad thinking. Behold, exhibit A from the St. Louis Post Dispatch.
The FIRST thing that ought to make a reasonable person roll their eyes is how this nonsense begins.
First, what kind of “production” worker? Oil production? No. At least not in a refinery. Either way, there is NO source to an actual person with or without relevant expertise in the matter. However, Google is your friend and can refute this nonsense fairly quickly. Worst case is that any POTUS has a minimal impact on gas prices.
Here are some point-by-point refutations of this social media bilge and a bunch of links to other folks who have said it before today.
How Much Oil Do We Really Have?
CLAIM: 1. There is enough recoverable crude oil within the continental US to supply current and projected future demand for 400+ years, and that’s just the oil we know about. It doesn’t account for future discoveries. That’s a fact…
REALITY: While it is true that we’re sitting on a bunch of oil in the US (264 billion barrels) and worldwide (2.1 trillion barrels), that’s actually proof that we’re going to run out. We use about 35 billion barrels of oil per year worldwide. Do the math. Some project 2050-2060 given current demand.
The fact of the matter is beside the point. We need to shift to other energy sources if we actually care about our children’s future. U.S. has more untapped oil than Saudi Arabia or Russia (cnn.com). It’s also worth noting that the current estimate of how much oil exists underground is in flux, but ultimately we are going to run out of oil someday. Either way, the notion that we have 400 years of oil is kinda 🦇💩🤪.
Who Needs Oil From Those Other Guys?
CLAIM: 2. We do not need to import a SINGLE DROP of foreign crude oil. The domestic oil industry can easily meet, and even surpass domestic demand. We’ve done it before, and we can do it again. That’s a fact…
REALITY: While it’s true that we could just ignore the world and use our own oil reserves, that is not profitable in a global economy. This is an overly simplistic approach to oil production that no profit-seeking oil company would tolerate. The cost of lifting oil in other parts of the world is so cheap that it makes NO sense to do anything but import that oil and refine it for whatever profitable enterprise exists at the moment. Welcome to capitalism. https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php | https://www.nasdaq.com/articles/america-produces-enough-oil-to-meet-its-needs-so-why-do-we-import-crude
CLAIM: 3. The domestic oil industry currently cannot satisfy domestic demand due to oil drilling restrictions imposed by the federal government. That’s a fact…
REALITY: This is a spin that goes both ways in this debate. (A) We are still recovering from production collapses originating with COVID in 2020, which caused the price of oil to plummet. (B) Like it or not, oil companies do things for profit. The current price of oil has essentially nothing to do with US oil production. It just doesn’t. Both Sides Spin Domestic Oil Production – FactCheck.org
Oh … and if you think the Keystone XL has anything to do with gasoline, think again. First, it is a small part of the 30-year old Keystone Pipeline that would not have been ready until 2030. Second, it would have pumped a form of crude oil that you CANNOT use for gasoline. Third, it was just going to get shipped to China anyway.
CLAIM (yes, it’s out of order): 5. We import foreign oil from countries that drill and produce it much cheaper than we’re able to because they do not implement all of the environmental safeguards that we do. Their methods are FAR more destructive to the environment than ours are. That’s a fact…
REALITY: It is irrelevant how clean or dirty anyones oil production methods are. Red herring. We import oil for a lot of good reasons, one of them being we are better at it than anyone else, and we also tend to use more oil than we export. Lately, it’s almost even, but slightly ahead.
Furthermore, crude oil comes in several forms and those forms determine what is possible to do with that particular kind of crude oil. US refineries are largely light crude oil, so any change to that infrastructure would require HUGE investments, so less profits for the oil companies. Again, NOT a thing POTUS controls. API | Why the U.S. Must Import and Export Oil | Why importing and exporting oil makes sense (washingtonpost.com) |
The Law of Supply and Demand?
CLAIM: 4. The price of EVERYTHING revolves around oil, and the law of supply vs demand dictates the price of oil. When oil is plentiful, commodities are cheap. When oil is scarce, commodities are more expensive. Right now, domestic oil is scarce, and the price of everything is high because of these restrictions imposed by the federal government. That’s a fact…
REALITY: While it is true that the price of oil has a wide footprint on the price of almost anything, blaming the POTUS for a significant portion (or any really) is a refusal to understand global economics and how the oil industry fits in. Besides, it takes time to get oil out of the ground. It’s not like you can just go poking holes in the Earth any time you want and liquid gold comes bubbling up from the ground like you were Jed Clampet from the Beverly Hillbillies!
A TON of complicated Science and Engineering goes into this process. Those experts ARE NOT cheap, and for good reason. Main reason is that oil exploration really needs to go well so that time and money aren’t wasted poking holes in the ground where there is no oil.
Again, it’s about profits and that’s what businesses are in business to do! Strange that the crowd who praises unrestrained capitalism doesn’t applaud the ability of oil companies to make a profit. It really is a self-defeating argument based on no understanding of how the oil industry functions, or for that matter, how businesses turn a profit. Bizarre. https://www.nrdc.org/stories/real-reasons-high-oil-and-gas-prices | Politicians need to square with the American people on gasoline prices (brookings.edu) | Does Joe Biden control gas prices? Not directly. Here’s why | Fort Worth Star-Telegram | U.S. Doesn’t Control Oil Production. But It Should. (theintercept.com)
Drilling for Oil is Hard Work?
CLAIM: 6. Every year, the federal government leases tracts of land to oil companies so they can explore on it for oil. If enough oil is found during exploration, the company can then apply for a drilling permit which allows them to drill a well. If no oil is found during exploration, or if the amount found is not enough to be profitable the lease expires without ever being drilled on. Leases that are active, but not being drilled on does NOT mean that oil companies are being lazy, or are trying to keep the oil for themselves, etc. etc. It means they’ve either explored the lease for oil and found nothing, or found oil but it’s not enough to justify drilling for. That’s a fact…
REALITY: MOST oil fields ARE NOT even on federal land (90%), so this argument about how hard it is to explore an oil field are nothing but red herrings. Technically, we get oil (24%) and natural gas (11%) onshore and off shore. Talk to the oil companies about ramping up their production and they’ll tell you a long story about profit margins. API | Drilling Down on Federal Leasing Facts
Dang it! Why Can’t You Accept That It’s Biden’s Fault?!
CLAIM: 7. it’s not Russia’s fault, or China’s fault, or Ukraine, or India, or Venezuela, or Iran, or Bangladesh, or any other countries’ fault as to why everything is so expensive right now. It’s Joe Biden’s fault, because he is suppressing the domestic oil industry for political gain.
REALITY: If NO other country is a factor in the price of oil, then most (if not all) of the claims that preceded this point are false, and you just refuted yourself in the process. Congratulations! Thank you for the large word salad.
You are insisting that Joe Biden is single-handedly controlling global oil futures. OPEC has nothing to do with it. Global supply and demand has nothing to do with it. It’s as if the USA is alone on planet Earth, but the gub’ment is blaming countries that don’t exist and economic systems that don’t exist so that they can control you.
To Hate POTUS or Not to … That is the Question
Half of the country is going to be mad every 4 years when they lose the election for POTUS. Fine. Get over it. Facts don’t care about your feelings and the fact remains that NO POTUS is largely to blame for the price of gasoline whether high or low. To think otherwise is to ignore reality and persist in failing to understand the global economy and how oil is produced. But I oversimplify.
Find a better reason to throw shade at POTUS.