Oil and Obama's Bad Math

My economics teacher in college once said, “The lottery is a tax on people who are bad at math.” I'm fairly sure he was quoting someone else but the point was well made and I've used the same quote many times myself. Lately, however, I sometimes I wonder if liberals count on people being bad in math when they spout their rhetoric. Democrats use figures that are so misleading they have to be relying on their audience not being sophisticated enough to figure it out. Alternatively, maybe they themselves don't understand the bad math and are simply repeating an argument they don't understand.

Last week, Obama made the following remarks in a speech at the Daimler Truck Manufacturing Plant in Mt. Holly, NC:

“As a country that has 2 percent of the world's oil reserves, but uses 20 percent of the world's oil -- I'm going to repeat that -- we've got 2 percent of the world oil reserves; we use 20 percent. What that means is, as much as we're doing to increase oil production, we're not going to be able to just drill our way out of the problem of high gas prices. Anybody who tells you otherwise either doesn’t know what they’re talking about or they aren’t telling you the truth.”

He has since quoted the same statistic many times in various venues. Occasionally, he includes ridicule of Sarah Palin's slogan, “Drill, baby, drill” from the last Presidential election and each time he repeats the lie, he is usually met with frenzied approval. The obvious, intended impression is that our consumption far outstrips the puny amount of oil we have so drilling more won't decrease our dependence on foreign supplies.

Here's the truth: According to an extensive geological survey conducted in 2000, there are approximately 3 trillion barrels of oil underground all around the world. If President Obama is correct that 2% of that is located in the US, that means there are 60,000,000,000 (60 billion) barrels of oil that is ours for the drilling.

The President also said the US consumes 20% of all the oil produced each year. In 2009, the US oil consumption was just under 19,000 barrels of oil per day (source). Now, I'm not a math wizard but I do have a calculator on my computer. At our current rate of consumption, the US has enough oil underground to meet our demand for the next 8,600 years!! Even if we were to double or triple our consumption of oil, we shouldn't have to worry about running out. There's plenty.

Here's another thing I learned in economics, where there is a greater supply of something, prices go down. If we increase oil production here, prices will drop. I guarantee it. Obama, on the other hand, doesn't seem concerned with increased domestic oil production. No doubt this is due to his affinities toward environmentalism. His strategy thus far to reduce our dependence on foreign oil seems to be 1) don't drill in Alaska, 2) ban off shore drilling, 3) kill the Keystone pipeline from Canada, and 4) suck up to oil producing despots in the Middle East. The result of his 4 pronged approach is that gas prices have doubled during his term in office.

Now, I don't want to over simply this. Even though there's a lot of oil in the ground, there's a lot involved with getting it out of ground and getting it refined. That costs money and companies have to be sure there will be a profit in it for them before spending billions of dollars. They need to be certain of the President's and Congress's commitment to a several-years-long undertaking.

Obama claims to not want higher gas prices, but every move he has made during his presidency seems geared toward doing just that. We feel the effect of his failed (successful?) strategy in our wallets every time we gas up.