Are President Obama’s Policies Causing U.S. Oil Production to Rise?

[wtmusic]

"The purpose of the graphic was to get people to think about why oil production had behaved in this manner over the past decade. A lot of people took the bait, and asked how I could possibly believe that President Obama was responsible for this rise in production given his apparent hostility toward the oil industry. Some people on the other hand offered up the real reason for the production increases. One pointed out that the above graph could really be broken into three parts: Falling production until 2005, flat production from 2005 until 2009 as some new projects began to come online, and an increase from 2009.

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The reason oil production rose under Jimmy Carter was because in 1973 President Nixon pushed through the Trans-Alaska Pipeline Authorization Act which cleared away legal challenges from environmentalists seeking to stop construction of the Trans-Alaska Pipeline. That pipeline started production in 1977, during President Carter’s first year in office, and as a result oil production rose for the first 2 years of his term.

Likewise, the reason that oil production has risen under President Obama is due to events that happened years earlier. In this case, it wasn’t some grand initiative that President Bush passed, rather it was years of steadily increasing oil prices that caused oil companies to approve a number of new projects that had marginal economics at lower oil prices. But these projects take some years to build, and as in the case of the Alaska Pipeline, decisions that were made 4-6 years earlier benefited President Obama with increased domestic oil production."

http://theenergycollective.com/robertrapier/74815/are-president-obama-s-policies-causing-us-oil-production-rise?utm_source=feedburner&utm_medium=feed&utm_campaign=The+Energy+Collective+%28all+posts%29

[zbdent]

1. Seems like the "supply and demand" doesn't seem to work these days ...

you know, demand's down, with the high prices ...

and yet, the prices are still higher this year (gee, actually since the mid-term elections of 2010, where Republicans took control and prices jumped 30 cents in two weeks) than last, and significantly more now than two years ago (when Dems "controlled" everything) ...

[Viking12]

2. Elasticity. Or, in the case of oil, the lack thereof.

Simple "supply-demand" models rarely apply to real world complexities.