By Robert Romano – Answering a question on America’s foreign dependence on oil from a Northern Virginia Community College student at a town hall event on April 19, Barack Obama boldly alleged, “we have actually continually increased U.S. production, so U.S. production is as high as it’s ever been.” It was a claim so false as to be laughable.
In fact, in 1970, the U.S. produced 9.6 million barrels of oil a day, the most we ever produced. But today, we only produce 5.5 million a day. And while domestic production slightly increased in the past two years, according to the Energy Information Agency (EIA), it now projects declines of 30,000 barrels a day in 2011 and 120,000 barrels a day in 2012, when production will only be 5.36 million.
So much for that. But then again, energy independence has always been a myth.
Or, in the least, the promise of energy independence by politicians dating back to Richard Nixon has been a fairy tale. In 1974, in response to the oil embargo, then-President Nixon promised, “Let this be our national goal: At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving.”
The only problem is that by 1980, we were only producing 8.5 million barrels a day — some 1.1 million less than we were in 1970. It declined every single year after Nixon set the goal while he was in office.
The challenge facing the country, with oil prices spiking once again, is that the U.S. consumes about 18.7 million barrels of petroleum a day, a net 9.6 million of which is imported. At $110 a barrel, we’re spending about $2.057 billion daily. If the price stays that high for a year, it will cost $750.8 billion, of which $385.4 billion would be shipped overseas!
So, besides the high prices of staples like gasoline and home heating oil, there are perfectly legitimate reasons to ramp up crude oil production, namely to stop shipping hundreds of billions of dollars overseas every day unnecessarily. That’s money that could be reinvested here.
Overall, the historic decline of the U.S. oil industry has played a key role in debilitating the domestic economy, driving overall investment overseas too, and killing American jobs.
Currently, the oil and gas industry employs 9.2 million. If the current 5.5 million barrels a day production were doubled, millions more jobs would be created. Instead oil production, like manufacturing, has been outsourced. With unemployment so high, shouldn’t we be creating jobs here in America?
The reasons to increase oil production go on. If the U.S. became energy independent, it would not be subject to foreign supply shocks, such as occurred in 1973 with the oil embargo.
Finally, because of its abundant supply, natural gas is one energy commodity that has not been spiking exponentially in price. Similarly, if the U.S. could dramatically expand its domestic supplies of oil, it would necessarily have an impact upon the price.
Although current oil prices are undoubtedly presently spiking because of the weak dollar, that does not mean that we do not need to be drilling. The reasons are plentiful.
So, with all of the benefits of being energy independent, why is it that politicians like Obama and Nixon only have paid lip service to the idea?
Robert Romano is the Senior Editor of Americans for Limited Government.