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Contrary to GOP Claims, We Can't Drill Our Way to Lower Gas Prices

Mar 6, 2012

Contrary to GOP Claims, We Can't Drill Our Way to Lower Gas Prices

Today, America is producing more oil, importing less foreign oil, and running more drilling rigs than anywhere else in the world.  Yet the amount of oil we drill at home doesn't set the price of gas on its own.  That is why we need an "all of the above" approach to develop new domestic energy sources, expand oil and gas production, and reduce our overall reliance on oil through fuel efficiencies and the development of renewable energy.  Let's consider the facts:

Fact #1: Domestic oil production is at its highest level since 2003. Domestic oil production in the United States is at its highest level in eight years.  In fact since 2008, the U.S. has increased production by nearly 1.3 million barrels per day - the highest daily production growth rate in the world.    

Fact #2: U.S. dependence on foreign oil is at its lowest level in 16 years.  Last year America relied less on foreign oil than in any of the past 16 years.  As a share of total consumption, oil imports declined from nearly 60% in 2005 to 45% in 2011 - the lowest level since 1995.

Fact #3: We are drilling more than ever before. The number of oil drilling rigs in the U.S. reached a record high last week, having quadrupled in number over the past three years. Between oil and gas drilling rigs, the U.S. now has more rigs at work than the rest of the world combined. [Houston Chronicle, 2/19/12]

Fact #4:   Gas prices are driven by the global market for oil, not U.S. production.  Despite Republican claims that more domestic drilling will drive down gas prices, the biggest factor in the price of gasoline is the cost of crude oil, which is set in a world market. With only 2% of the world's oil reserves, the U.S. simply can't drill enough to move prices in the global market.  In fact, the biggest factor in the high price of oil right now is instability in the Middle East.  As geopolitical uncertainty increases-especially as it relates to Iran-speculative oil trading can drive up prices even more.       

Fact #5: Only an "all-of-the-above" energy strategy can shield middle class families from volatile increases in gas prices.  The only way to protect middle class families from exposure to high gas prices is to reduce U.S. dependence on oil and heed President Obama's call for an "all of the above energy strategy." Domestic drilling alone is not enough.  We must continue the development of renewable energy sources and fuel-efficient vehicles that can reduce our reliance on oil.  What we should not be doing is continuing to shower tens of billions in subsidies and tax giveaways on the oil companies that are enjoying record profits, while middle class families see their gas prices rise. Senate Democrats are fighting to repeal these wasteful tax giveaways to big oil companies.