Oil imports spike as Obama oil ban decreases domestic production

Oil imports spike as Obama oil ban decreases domestic production Conn Carroll Beltway Confidential Washington Examiner

President Obama sent a letter to Congress earlier this week urging them to “eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil.” Let’s leave aside for a second the fact that even after 30 years of subsidies, clean energy energy accounts for just over 1% of all U.S. energy production. If Obama really wanted to reduce our dependence on foreign oil tomorrow he could end his Gulf of Mexico permitorium on offshore drilling.

Here are the facts: According to projections made by the Energy Information Administration in April 2010, the Gulf of Mexico should have produced 1.84 million barrels of oil a day in the fourth quarter of 2010. Instead, according to the most recent EIA estimate, due to the Obama permitorium, the Gulf only produced 1.59 million barrels. That is 250,000 barrels a day in lost production. Overall, since Obama instituted his drilling moratorium, oil production from the Gulf is down more than 10%.

But while Gulf oil production is down from pre-moratorium estimate, total oil consumption is actually higher than EIA predicted last year. Total crude oil input to refineries is up from an estimated 13.85 million barrels a day to an actual 14.25 million barrels. But if domestic production is down and consumption is up, where is the extra oil coming from?

Foreign oil.

While oil production in the Gulf is down more than 10% from April 2010 estimates, net crude oil imports are up 5%. At $83 dollars a barrel (the approximate average price of oil in the fourth quarter of 2010) that means Obama’s oil drilling permatorium increased American dependence on foreign oil by about $1.8 billion dollars in the fourth quarter of last year alone. The numbers only get worse as Obama’s permitorium further cuts into production. A Wood Mackenzie study predicts that for all of 2011 the permitorium will result in the loss this year of about 375,000 barrels of oil a day.

More imported oil also means higher prices at the pumps. The EIA explains: “Retail gasoline prices tend to be higher the farther it is sold from the source of supply.” It costs more money to transport oil to your gas station from the Persian Gulf than from the Gulf of Mexico.

Read more at the Washington Examiner: http://washingtonexaminer.com/blogs/beltway-confidential/2011/04/oil-imports-spike-obama-oil-ban-decreases-domestic-production#ixzz1Lj0Q5hyC