Sorry, Mr. President: Turns Out We Can Drill Our Way to Lower Gas Prices

Four years ago today, President Obama proclaimed, “we can’t just drill our way to lower gas prices.” Once again, President Obama is on the wrong side of history. In 2012, gasoline was $3.72 per gallon. Today, it is $1.73 a gallon.

What’s changed is a massive increase in world oil production—almost all of which came from the United States. The chart below shows the increase in total world oil production in red and the increase in oil production from the U.S. Nearly 82 percent of the total increase came from the U.S. alone.

Source: EIA, International Energy Statistics, Total Oil Supply,
https://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=53&aid=1

Since the president made his claim, U.S. monthly oil production has increased by 52 percent. The price of a barrel of oil has fallen by over 70 percent since June 2014. And thanks in large part to technological advancements in hydraulic fracturing, subsurface imaging, and horizontal drilling, 95 percent of oil producers can extract crude oil for under $15 a barrel; a 30 percent increase since June of 2014.

The benefits of these innovations have rippled throughout the economy. Gas prices have dropped by more than 50 percent since February 2012, putting more money in Americans’ pockets. That means many low-income households, who spend a larger portion of their incomes on energy than wealthier households, may no longer have to choose between essentials like food, heating, and electric bills.

And as a recent study from the Institute for Energy Research shows, Americans would have even more money to save and spend if the Obama administration stopped holding our resources under lock and key. According to the study, opening federal lands to energy production would increase annual GDP by $127 billion, create 552,000 jobs a year, and raise annual wages by $32 billion over the next seven years. It’s the best economic stimulus the American people could ask for.

But instead, President Obama recently proposed a $10 tax on oil, which will raise gas prices by 24 cents a gallon. The oil tax sums up the president’s energy policy, which has consistently ignored the benefits of promoting affordable, reliable energy production—and endeavored to shut it down.

Much has changed in the last four years, as American energy producers have consistently innovated and reduced costs for families and motorists. In spite of President Obama’s previous claims and restrictive policies, increased energy production has provided hard-working Americans with lower gas prices. Imagine what we could do if the next administration simply let Americans get back to work?