Here’s something for the “Drill Baby Drill” crowd. After a steady decline during George Bush’s administration, U.S. domestic crude oil production has climbed during the Obama administration to levels last seen in 2004, when gasoline prices were below $2 per gallon.
If we include last week’s US EIA data, we can extend that graph up to above 5.6 million barrels per day of domestic production. Gasoline averaged $1.60 per gallon when we last had that production level in 2003.
Granted, this increased activity began during Bush’s tenure, but there doesn’t seem to be much evidence of production slowdowns due to administrative decisions or environmental regulation. Donald Trump said he would work to increase domestic production if he were president, but the free market seems to be doing a fine job of that just on its own.
Halliburton reports a a record $5.3 billion in revenues for the first calendar quarter of 2011, compared to a relatively meager $3.8 billion a year ago. They attribute this strong growth and their higher margins to increased demand for their oil field services due to drilling activity in the United States.
The thing everybody ignores: Oil is a worldwide commodity. Increased use of gasoline in China, India, Egypt, Saudi Arabia, and everywhere else with an improving standard of living means less for Americans. Worldwide crude production has been flat to declining since 2008 in spite of massive investments by oil producers to squeeze more black gold out of the ground, which means the supply has been steady to declining while demand has increased.
The law of supply and demand means retailers control market pressure by adjusting the price. Hence, four dollar gasoline. It’s that simple. If you want to burn it, you pay the price. If you don’t want to pay the price, you go without.
It’s a tough lesson for Americans and for the world. The economic pie has gotten larger and larger since Industrialization began 600 years ago. Our economic theories absolutely count on this growing pie because this model has always worked before. More raw materials means more people can get more stuff, which translates into higher GDPs worldwide. More profits for Halliburton, Exxon, BP and Shell means bigger returns for shareholders, more jobs for workers, and more economic activity all around.
It’s been easy to push the consequences of this growth out of our minds. Production and manufacturing and refining are in those “other” places where brown skinned people live, and we pretend we do them favor bringing our consumer lifestyle to the hinterland with the same enthusiastic righteousness of Christian missionaries 300 years ago. We’re beginning to push against the boundaries of growth, though, while our worlds have become much smaller. Our political battles are beginning to center on the question of how much we’re willing to sacrifice for the sake of material goodies. Is it really worth it to destroy what remains of our wilderness and human dignity for more exurban McMansions and our heavily consumerist lifestyles? What do we value: the other human, or ourselves?
And *ahem* speaking of shiny consumer goodies…
Chart from Climate Progress using US Energy Information Administration data.