To listen to former president Barack Obama, he’s single-handedly responsible for the USA’s global lead in oil production. That makes sense, right? After all, our oil output rose dramatically between 2008 and 2016, and that’s when Obama was POTUS, so why not credit him with that achievement? Well, how about because it’s not true?
• The USA has been a major oil producer for a long time, but in recent years we’ve gone from major to dominant. It used to be we pumped just under half the oil we needed ourselves, and had to import most of it from other countries – mainly around the Persian Gulf, giving that unstable part of the world far too much influence over our foreign policy. Now we’re 75% self-sufficient in oil, thanks to a 77% rise in output between 2008 and 2016.
• Obama pointed that out last week during a discussion at a Houston think tank. Asked to list the achievements of his presidency, one of the things he came up with was signing the US up to the massively expensive Paris Accords on climate change (it’s okay; we’re leaving it now) – but then, maybe realizing that this might not go down too well in oil-rich Texas, he reminded the audience of the production rises and claimed, “that was me, people.”
• This is great, except it wasn’t him. Yes, Obama presided over the historic increase in crude output, but he didn’t do anything to cause it. There were two factors in rising US oil production, and they’re familiar to anyone with even a basic grasp of economics – price and technology.
• The bulk of the increase took place between 2010 and 2016, and what kicked it off was the so-called “Arab spring”. This wave of protests and uprisings, which Obama supported but didn’t start, was meant to bring democracy to the Middle East. Instead it kicked off a series of uprisings and civil wars, and massively destabilized the region. With several major oil producers either tearing themselves apart (Iraq), under western sanctions (Iran) or playing power games (Saudi Arabia), the global oil supply fell and prices went up.
• The rise in prices meant that a lot of smaller and older US oil fields, that had been out of production for years, suddenly became economical again. If oil costs more, companies are willing to spend more getting it out of the ground because they can still make a profit despite the higher costs. That helped boost the US oil boom, and while the high prices didn’t last forever, by the time they started to sink again technology had stepped in.
• The Obama presidency also saw the rise of two new ways to get oil out of the ground – fracking and horizontal drilling. These opened up even more fields, and production jumped again, but that was down to the oil companies, not the White House.
• The only thing Obama really did to help increase production was to lift a 40-year ban on US oil exports, a move that gave US oil companies access to global markets and pushed them to pump more oil. But even here, the former POTUS can’t really take the credit. The ban was ended as part of an omnibus energy spending bill, and the Democrats supported the parts of it that dealt with wind and solar energy. The liberalisation of oil exports was pushed by Republicans.
So yes, former president Obama, the USA overtook Russia to become the world’s largest oil producer on your watch. But that wasn’t because of you.