The White House has been proudly broadcasting the fact that booming U.S. oil production could help save Americans $700 at the pump this year — a somewhat ironic move given that President Barack Obama has previously dismissed oil’s role in low gas prices.
On Friday, the White House tweeted a chart showing how booming U.S. crude oil production was contributing to a huge drop in oil imports. The tweet also linked to a piece co-authored by White House senior advisor Brian Deese and Jason Furman, chairman of the Council of Economic Advisers.
The average American family is on pace to save about $700 at the pump this year. http://t.co/xA1novsABn #ActOnClimate pic.twitter.com/CUQLfFu9f0
— The White House (@WhiteHouse) June 19, 2015
Obama’s economic advisers wrote in their Washington Post oped that a “historic increase in U.S. oil production has increased global supply and put downward pressure on prices.” But the advisers also used their article to argue declining oil consumption was really the driving force behind low gas prices.
The authors wrote that “a potentially even more important reason has gotten far less attention — a historic decline in the amount of oil that our economy is consuming.”
“Indeed, in 2014 Americans used less petroleum than they did in 1997, despite the fact that the economy is nearly 50 percent larger than it was 17 years ago,” the continued, citing a new report by the White House Council of Economic Advisors. That report claims that increases in fuel efficiency, increased use of biofuels and “demographics and economic factors.”
Obama himself has also dismissed U.S. oil production’s ability to impact gasoline prices. In a 2012 speech, Obama said “we can’t just drill our way to lower gas prices.”
“And you can bet that since it’s an election year, they’re already dusting off their three-point plans for $2 gas,” Obama said in a speech in Miami, Florida. “I’ll save you the suspense: Step one is drill, step two is drill, and step three is keep drilling. We heard the same thing in 2007, when I was running for president. We hear the same thing every year. We’ve heard the same thing for 30 years.”
“Well the American people aren’t stupid,” Obama said. “You know that’s not a plan — especially since we’re already drilling. … You know there are no quick fixes to this problem, and you know we can’t just drill our way to lower gas prices.”
From 2008 to 2014, U.S. oil production boomed from 5 million barrels per day to 8.7 million barrels per day as companies used hydraulic fracturing and horizontal drilling to tap into underground shale formations.
Growing U.S. production and projections of weaker global oil demand helped drive prices down from around $100 a barrel in June 2014 to about $48 per barrel by January 2015. Prices have come up in recent months to about $60 per barrel.
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