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Obama: ‘Drill Drill Drill won’t work. And you can thank Me that it did.’

Irony alert. (HuffPo link. Sorry.)

Anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about, or they’re not telling you the truth — one or the other,” Obama said at an event held in New Hampshire to tout his energy policies.

He noted that, in fact, oil production in the United States has hit its highest level in eight years, that more rigs are operating in the U.S. than in the rest of the world combined, that more than 400 drilling permits have been granted since the massive BP oil spill, and that for the first time in 13 years, oil imports account for less than half of all U.S. oil consumption.  [Emphasis added.]

President Obama’s statement denies that drilling can increase production, while taking credit for the fact that it did.

It would seem to me that there’s a connection, a correlation, perhaps even a causal relationship, between the number of rigs drilling for oil in the U.S. and the increased production of domestic oil.

Perhaps if we did something to encourage more wells to be drilled, the result would be even more domestic oil. More oil in the world marketplace would put downward pressure on oil prices. And we’d be even less dependent on some foreign despot for oil.

That makes me say “Yes We Can!” drill our way out of this.

But hey, according to the President, I’m either dumb or a liar. Maybe both.

As Mark J. Perry has ably demonstrated at his brilliant Carpe Diem blog, not only have rig counts increased in recent years (from 700 to 1,000 to about 2,000 today), but the proportion of those rigs targeting oil vs. gas has shifted dramatically, from a historic average of 20% to about 60%.

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That means that rigs nominally targeting oil have increased from ~150-200 to ~1,200 since 2009. This is a direct reflection of the collapse in natural gas prices since the shale boom and the continued strength in oil prices.

As much as Obama would like to take credit for the increase in oil production, I can’t think of a single Federal action or initiative to credit for this shift. This is organic, driven by the reality of prices and economics. It is mostly happening on private leases, under the jurisdiction (and regulation) of the states. 

By the Administration’s own numbers, offshore oil production lags the pre-Macondo forecast by several hundred thousand barrels per day. They can count plans and permits approved till the cows come home, but the fact is the permitting  process has slowed markedly. By the latest count I can recall, eleven deepwater drilling rigs had left the Gulf of Mexico for steadier work overseas.

But I’m either stupid or a liar. Or both. But I repeat myself.

Cross-posted at stevemaley.com.


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