It’s ironic that after spending the entirety of his presidency blaming the state of the economy on George W. Bush, Barack Obama is finally taking credit for our economic boom once he’s left. In light of oil prices recently tanking from $80 a barrel to around $50 (after rising earlier in the year), Obama tooted his own horn once again. Speaking at the Baker Institute for Public Policy in Houston, Texas, Obama said:
I was extraordinarily proud of the Paris Accords because, look I know we’re in oil country and we need American energy. And by the way, American energy production, you wouldn’t always know it, but it went up every year I was president. And you know that whole suddenly America’s like the biggest oil producer … that was me, people.
But was it really? As President, Obama could directly control the levels of oil production on federal land, but could only influence private oil production through regulation (or failing to approve projects such as the Keystone XL pipeline). As is always the case in politics, Obama’s claim is one that’s “technically true” (that oil production rose under his presidency), but extremely misleading (because it had nothing to do with him).
Oil Production on Federal Land Tanked
As Obama exited office, domestic crude oil production had seen the largest nominal increase under any presidency, but where the growth in production occurred dispells any claims Obama can take credit for it.
The figures through 2016 from the Bureau of Land Management (BLM) tell a story of rising oil production on private land and bottlenecked production on federal land. According to an analysis of the numbers from the Western Energy Alliance, major indicators of federal onshore and natural gas operations declined, including the number of leases, acres leased, permits approved and wells being drilled.
As a result, while private oil production increased 108% from 2009-2017, it increased less than 20% on federal lands. And while Obama was speaking about oil instead of natural gas, that energy source suffered a massive decline in production on federal land.
Alternatively, below is the crude oil production chart quoted in million barrels per day increased of percent increase/decrease.
Oil and gas production on federal land is still far below their historical averages. Due to regulations passed under the Obama administration, the amount of time it takes the BLM to process a permit increased nearly 20% under Obama from 205 days to 242 days.
The Energy Information Administration Credits Technology, Not Obama for the Oil Boom
As FactCheck.org noted, Obama’s own EIA credited technological improvements in drilling for oil, not Obama, for the increase in production. “U.S. crude oil production has increased significantly over the past 10 years, driven mainly by production from tight rock formations using horizontal drilling and hydraulic fracturing,” the EIA said in April 2018.
Obama released regulations in 2015 to reduce fracking on federal land, which Trump later shredded.
What About When Oil Prices Tanked Under Obama in 2015?
Oil prices suffered a rout in 2015 after beginning to teeter in late 2014, but that was a result of OPEC (primarily Saudi Arabia) starting a price war with the U.S. Two years into the price war, the Saudis had increased daily production from 9.75 million barrels per day to 10.5 million, bringing the price of oil below $50 and costing the Saudi’s themselves $525 million daily in lost revenue.
It was a costly strategy attempting to crush America’s shale industry but ended up only increasing the Saudi’s oil market share by 1% after two years.
The main point here is that the only significant decline in oil prices under Obama was due to Saudi Arabia, not Obama.
Unlike Obama, Trump is Behind The Recent Price Drop
The recent oil price drop from $80 to $50 also can be attributed to the Saudis – but Trump can actually take credit for it.
According to CNBC, oil analysts are in agreement that Trump “hoodwinked” Saudi Arabia into pushing the global oil market into oversupply. “They got sort of tricked here,” said John Kilduff, the manager of a hedge fund that specializes in energy-related investments. “The Russians and the Saudis in particular ramped up production, ramped up exports ahead of what was supposed to be severe sanctions on Iran, and when the administration gave the eight waivers to Iran’s largest buyers, it undercut that whole equation” he continued.
“So now we’ve tripped into an oversupply situation almost overnight because of the severe reaction by Russia and the Saudis to cover for Iran losses, which never materialized.”
The Saudi’s will eventually wise up and adjust output, but it’s undeniable how clever Trump’s move was.