Though oil demand is at its lowest since 1997, oil prices (and gas prices along with them) are once again on the rise. Analysts are projecting gas prices will top $4 a gallon nationally and perhaps reach record highs later this year. Despite relatively low demand and surging production levels in the U.S., prices are of course rising due to myriad factors, including speculation and instability in the Middle East.
For their part, Republicans have latched on to these rising prices as proof that President Obama has pursued an “outrageously anti-American” energy policy. As with most other overheated conservative attacks on the president, the facts don’t line up in their favor.
Here’s FIVE key facts about rising gas prices, the GOP and Big Oil.
1. Domestic Energy Production Has Soared Under President Obama: The number of oil drilling rigs in the U.S. hit a record 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. The current oil boom has buoyed the projections of some leading oil industry analysts:
“It’s staggering,” said Marshall Adkins, who directs energy research for the financial services firm Raymond James. “If we continue growing anywhere near that pace and keep squeezing demand out of the system, that puts you in a world where we are not importing oil in 10 years.”
2. President Obama Has Taken Huge Steps to Reduce Our Dependence on Oil: In addition to overseeing a dramatic increase in domestic energy production (including from renewable sources), the president has also taken steps to reduce the amount of oil we consume. Most notably, new modern standards requiring cars and light-duty trucks to achieve an average fuel economy rating of 54.5 miles per gallon by 2025 will cut U.S. oil use by 2.2 MILLION barrels of oil per day by 2025—a move that will save consumers $1.7 TRILLION and also cut greenhouse gas pollution by 6 BILLION metric tons. The 54.5 MPG standard by 2025 builds on an earlier Obama administration policy to increase fuel efficiency to 35.5 MPG by 2016, a one-third imrovement to fuel economy standards that had previously languished in neutral for more than 20 years. Even as gas prices are rising, Americans’ cars are becoming significantly more efficient.
3. Big Oil Made a Record $137 BILLION in Profits Last Year: Just the five largest oil companies—ExxonMobil, ConocoPhillips, BP, Chevron and Shell—booked a combined profit of $137 BILLION in 2011, even though these companies produced 4 percent less oil in 2011. And of course Big Oil’s record profits are directly related to increasing pain at the pump for American consumers.
4. Republican Politicians Oppose Ending Taxpayer Handouts to Big Oil: Every Republican presidential contender and nearly every Republican member of the House and Senate has signed a pledge to oppose ending taxpayer handouts to Big Oil—handouts that will add up to more than $40 BILLION over the next 10 years. In addition, Republicans have repeatedly voted in lockstep to block efforts to repeal the tax giveaways to Big Oil. President Obama, however, remains undaunted and has once again included repeal of these wasteful giveaways in his budget for 2013.
5. Republican Politicians Want to Cut Big Oil’s Taxes Even More: Both the House Republican budget plan released last year (and supported by nearly every Republican member of the House and Senate) and the tax plans of every GOP presidential contender call for cutting the corporate tax rate by one-third or more. This huge tax cut could result in another big windfall of billions of dollars for Big Oil. By contrast, President Obama has proposed closing wasteful tax loopholes and wants to clamp down on the use of foreign tax shelters (ExxonMobil uses at least 20) that allow huge corporations to avoid paying their fair share in U.S. taxes.
IN ONE SENTENCE: Instead of giving billions more in handouts to Big Oil despite the industry’s record-breaking profits, President Obama has presided over a dramatic increase in domestic energy production coupled with unprecedented efforts to decrease Americans’ spending at the pump by modernizing fuel economy standards.