President Barack Obama says his administration has made the U.S. less dependent on foreign oil than it has been in nearly 20 years, and that Republicans would “let oil companies write this country’s energy plan.”
Mitt Romney says he has a plan to “establish America as an energy superpower in the 21st century,” and says the Obama administration has “sought repeatedly to stall development of America’s domestic resources.”
They can’t both be right, and our Investigations Inc. fact checkers have found they aren’t.
In his speech to the Democratic National Convention in which he claimed Romney would turn U.S. energy policy over to the oil companies, President Obama touted increased energy self-sufficiency under his watch.
“In the last year alone, we cut oil imports by one million barrels a day — more than any administration in recent history,” Obama said. “And today, the United States of America is less dependent on foreign oil than at any time in nearly two decades.” (Read More: Obama May Release Oil From Strategic Reserve: Analyst.)
The figures are accurate according to the U.S. Department of Energy’s Energy Information Administration, which reported in July that net imports accounted for just 45 percent of U.S. petroleum consumption. But the same agency said in May that administration policies had little to do with a decline in import dependence that began in 2005.
“(T)he trend results from a variety of factors,” said the May 25 report. “Chief among those is a significant contraction in consumption.”
While part of the drop in demand is a result of increased energy efficiency — a goal of the administration — researchers also blame the downturn in the economy since the 2008 financial crisis. The report notes that demand began to bounce back after the economy bottomed out in 2009.
Mitt Romney, in a white paper released on August 23, called the Administration’s energy policy a “hodgepodge,” that has “sent billions of taxpayer dollars to green energy projects run by political cronies…and sought repeatedly to stall development of America’s domestic resources.”
In a speech that same day, he promised a new policy that would free the U.S. of foreign oil once and for all.
"I will set a national goal of … North American energy independence by 2020. That means we produce all the energy we use in North America," he said. (Read More:
Citing analyst reports from Citigroup , Raymond James and others on the improving supply-demand picture when it comes to energy imports, the Romney campaign unveiled an agenda that includes increased on and offshore production, less regulation, and transferring more energy development authority to the states.
But the very analyst reports Romney cites paint a much less dire picture than he does.
Both say North America is already on a path to energy independence by 2020, but that it depends both on maintaining supply and continuing to reduce demand through conservation and the use of alternatives.
“By 2020 — based on the assumptions we previously outlined for domestic oil production, growth in biofuels, and declines in demand — we expect net imports to reach essentially zero. That’s right — oil independence,” wrote Raymond James analysts J. Marshall Adkins and Pavel Molchanov in an April 2 report entitled, “Yes, Mr. President, We Believe We Can Drill Our Way Out of This Problem.”
The report says U.S. oil companies have already overcome regulatory and geological challenge to reverse a 40-year decline in oil supply. (Read More: No Need to Import OPEC Oil: Pickens.)
The Citigroup report dated March 20 is boldly titled “Energy 2020: North America, the New Middle East?”
“For the first time since 1949, the U.S. has become a net petroleum product exporting country and has edged out Russia as the world’s largest refined petroleum exporter,” the report said. The authors acknowledge the role the recession has played in depressing demand.
“But that would only get you half the answer,” the report said, noting that between increased U.S. oil and natural gas production and steady growth in Canada and Mexico, North American production is growing at a faster rate than OPEC can sustain.
So can the President claim credit for this U.S. energy boom? He certainly is trying.
A campaign adcrows, “Under President Obama, domestic oil production is at an eight year high.”
While that figure is accurate according to the Energy Department, it again does not tell the full story. In a March 12 report, the Energy Information Administration says production of oil, natural gas and coal on federal lands — most of which are offshore — declined in 2010 and 2011. In other words, the boom in production has been primarily on private lands, and Republicans say more public lands should be opened to exploration and drilling.
But Citigroup attributes much of the decline in production on public lands to the offshore drilling moratorium following the 2010 Deepwater Horizon oil spill. Now, the report said, “deepwater production is bouncing back,” setting up offshore production for “a hockey stick trajectory that takes total Gulf of Mexico output from 1.3 million barrels per day today to 3.75 million barrels per day by 2020.”
In other words, U.S. offshore oil production could nearly triple by the end of the decade, and this election — and the candidates — could have very little to do with it.
—By CNBC's Scott Cohn