WASHINGTON (TND)- Americans are feeling the pain at the pump as gas prices continue to dig a hole in our wallets. Today’s price per gallon is a dollar more than last year’s average.
Recently, Energy Secretary Jennifer Granholm said in an interview that “over 7,000 leases that have been given to oil and gas companies to do that drilling and they are not being used." She went on to say that in the short term, “there is nothing that the Biden administration is doing that is preventing oil and gas companies in the United States” from pulling more oil.
So, Secretary Granholm makes some big claims about the oil and gas industry with these statements. Now, the first part of what the secretary said is mostly true, but we're taking a closer look at that second part.
For oil and gas leases, only about 47 percent are used and there are actually 7,700 permits for drilling out there unused.
According to the Department of the Interior, 2019 was a record year for oil production, using the least amount of acreage in history. Historically, somewhere near 50 percent utilization seems pretty normal, so Grandholm’s quote is leaving out a key fact--it’s never 100 percent usage.
But about the administration’s influence, Scott Sheffield, the CEO of Pioneer Natural Resources Co. said, “the Biden Administration’s policies are all based on importing more oil from the Middle East, less from the U.S.”
He and other business leaders have said that the president's efforts to stop oil and gas leasing and drilling causes concern for investors who already don’t want the U.S. industry to grow too fast.
Just Friday, the Department of Interior recommended a price increase for oil and gas companies to drill on public lands and waters.
The National Desk’s Fact Check Team dug through the report and found that part of those increases have remained the same since 1920 at 12.5 percent, the administration claims that a lot of money has been lost because of the unchanged rate.
The American Petroleum Institute is the group that represents America's natural gas and oil industry. They are not happy about the recommendation, releasing a statement accusing the Biden administration of sending “mixed signals” to Americans during a time when rising costs are apparent and, “the White House said the president ‘is using every tool available to him to work to lower prices and address the lack of supply.’”
You may recall another administration policy that shut down the Keystone Pipeline in January--part of their overall goal of getting to a net-zero emissions economy by 2050.
The Biden Administration is taking a number of actions that they say will bring those prices down, but they also keep pointing to OPEC, the world oil cartel, as part of the problem.
The Fact Check Team also took a deeper look at some of those oil production numbers around the world.
The administration is continuing to call on OPEC to move faster on increases in oil supply, and energy Secretary Granholm said in that same interview of OPEC that “they have 90 percent of the supply." OPEC has only 13 countries that are members of their group and according to OPEC’s own numbers, they don’t control 90 percent.
The numbers that are actually locked in are from 2018, and that shows OPEC controlling 80 percent of the world’s crude oil reserves. Now, that’s still a big number, so we verified with another source.
British Petroleum, what we all know as BP, actually has a different number. They put OPEC closer to controlling 70 percent of the world’s oil. Another part of this is the difference between U.S.-produced oil and OPEC-produced oil.
The United States doesn’t have the world’s biggest oil reserve, but we are a big oil producer. In fact, we’re actually the world’s biggest oil producer. Last year, we churned out more than 16 million barrels of oil per day.
Compare that to Saudi Arabia, which we hear a lot about. They produced 11 million barrels per day.
Another big producer that we don’t hear too much about is Russia. Russia is actually just behind Saudi Arabia at 10 million barrels a day last year. Other countries we talk about, such as Iraq, only produced 4 million while Iran produced 3 million.
According to BP, every other country around the world is in that same boat, still in the single digits.
The Biden administration is releasing 50 million barrels of oil from the strategic petroleum reserve. So the big question is: Has this effort lowered prices for Americans or helped with the country’s gas supply?
According to the energy information administration, in 2020 the U.S. consumed an average of over 18 million barrels of petroleum per day, and keep in mind that with COVID-19 lockdowns, 2020 was an extremely low year for oil use. So, that 50 million barrels of oil will cover a little more than two days.
As far as gas prices go, an economics professor from Pennsylvania State says the 50 million barrels could translate to a three to five-cent decrease on pump prices at the end of December at the earliest. He says this release is not the cure to high gas prices and that the country would need a more sustained supply increase.
We checked the prices ourselves. A week ago, the average price for a regular gallon of gas was about $3.41, today it’s $3.39, so a two-cent decrease so far, but a year ago, the average cost was about $2.13. So, as of right now, it doesn’t look like we’ll be seeing too much relief as we head out to fuel up.