Gas Price Rhetoric by The American Petroleum Institute and Big Oil Special Interests Debunked
Public Lands Oil Production Data Shows No Correlation Between Prices at the Pump
HELENA, MT- The American Petroleum Institute and Big Oil are steadfast in continuing their misinformation campaign and false rhetoric about an executive order set in place by President Biden to pause federal oil and gas leasing. Big Oil and its lobby arm are falsely claiming that the new executive order will cause prices at the pump to jump, but multiple economists and professionals have said this one decision is likely to have no effect on gas prices. Oil production data analyzed by Accountable.US confirmed that there is no correlation between public lands and waters oil and production and gas prices.
“The American Petroleum Institute and Big Oil are, once again, falsely claiming that the sky is falling. President Biden’s temporary pause on public lands and waters oil and gas leasing is to ensure that taxpayers stop getting ripped off and our public lands are viable for future generations,” said Accountable.US spokesperson Jayson O’Neill. “It’s a shame that so many of our elected leaders are more concerned about Big Oil corporations’ bottom-lines than taxpayers’ pocketbooks and their constituents’ support for conserving public lands.”
With the deep freeze still hobbling Texas refineries — accounting for nearly 40% of domestic crude oil production — crude prices are already climbing, which will soon be reflected at the pump. After the apparently deliberate misinformation campaign about renewable energy earlier this week, no one should be surprised if oily politicians and the American Petroleum Institute lie again about the cause of a gas price spike.
But data analyzed by Accountable.US find that as production on public lands and waters fluctuated up and down over that past decade and increased after the export ban was lifted in 2015, gas prices at the pump remained relatively unchanged. That is the reality of oil prices being determined by international markets, not a temporary public lands and waters leasing pause.
Accountable.US compiled the American Petroleum Institute’s and Big Oil’s rhetoric versus the actual reality regarding gas prices:
RHETORIC: The American Petroleum Institute Says A Pause On Public Lands Oil Leasing Will Drive Up Retail Gasoline Prices
The American Petroleum Institute Said A Leasing Pause Would Lead To Higher Prices. “The main exception to the API’s openness to Biden’s agenda is his promise to target fossil fuel production on public lands and offshore waters, an area responsible for nearly a quarter of U.S. greenhouse gas emissions from energy production. The API argues the policy, which Biden’s nominee for Interior secretary, Rep. Deb Haaland, could pursue without Congress, would lead to increased energy imports and higher prices for oil and also harm the budgets of states such as New Mexico that rely on royalty payments from federal drilling. ‘The consequences would be absolutely devastating to American communities and the American public,’ [API CEO Mike] Sommers said. ‘We will be making that position clear to the Biden administration.’” [Washington Examiner, 01/13/21]
API Says Crude Oil Prices Mirror Retail Gasoline Prices. “Changes in gasoline and diesel prices mirror those of crude oil prices, which are determined in the global crude oil market by the worldwide demand for and supply of crude oil. Per-barrel costs for crude oil – the No. 1 factor in the cost of producing gasoline and diesel – reflecting the global oil supply/demand balance and inventories, among other factors. Solid economic growth, driving U.S. petroleum demand (20.5 million barrels per day in Q2 2019) to its highest level since 2007 – up by 178 thousand barrels per day from Q1 2019.” [American Petroleum Institute, accessed 02/16/21]
RHETORIC: Other Oil Industry Associations Go Further—Saying Biden Has An “Ulterior Motive” To Keep Retail Gasoline Prices High
The Louisiana Oil And Gas Association Says Biden Has An “Ulterior Motive” To Keep The Price Of Gasoline High. “’Biden, the things that he is going to do will push the price of oil up and if the price of oil is up then the refineries have to pay more for the oil and then the price of gasoline goes up,’ said [Louisiana Oil and Gas Association interim president Mike] Moncla. Moncla says the administration is attempting to push Americans away from oil and gas and towards green and electric energy. ‘Is there an ulterior motive for this administration that is going to keep the price of gasoline high and get people to move into other areas?’ asked Moncla.” [Louisiana Radio Network, 01/22/21]
The Louisiana Oil And Gas Association Says Biden’s Policies “Will Push The Price Of Oil Up […] And Then The Price Of Gasoline Goes Up.“ “Two days into office and the Biden Administration is following through on campaign promises to roll back American oil production and global warming inducing carbon output via executive action. Louisiana Oil and Gas Association interim president Mike Moncla said the industry is not happy about it. […] Moncla said the industry has been anticipating these moves. November 2nd, the day before the Presidential election, oil was 37 dollars a barrel. It is now 55 dollars a barrel. He said that will end up hitting Louisianans in the pocketbook. ‘Biden, the things that he is going to do will push the price of oil up and if the price of oil is up then the refineries have to pay more for the oil and then the price of gasoline goes up,’ said Moncla.” [Louisiana Radio Network, 01/22/21]
The Petroleum Alliance Of Oklahoma Said “Oil And Natural Gas Prices Are Going Up.” “This is just the start. It will get worse,’’ said Brook Simmons, president of the Petroleum Alliance of Oklahoma. ‘Meanwhile, the laws of physics, chemistry and supply and demand remain in effect. Oil and natural gas prices are going up, and so will home heating bills, consumer prices and fuel costs.” [Associated Press, 01/26/21]
RHETORIC: The American Exploration And Production Council Claimed The EO Would Kill Jobs.
The American Exploration And Production Council Called The EO A Penalty For The Oil And Gas Industry. “Penalizing the oil and gas industry kills good-paying American jobs, hurts our already struggling economy, makes our country more reliant on foreign energy sources, and impacts those who rely on affordable and reliable energy,” Anne Bradbury, president of the American Exploration and Production Council, said in a statement. [CNBC, 01/27/21]
The Western Energy Alliance Also Filed A Lawsuit To Challenge The EO, Claiming It Violated Multiple Acts.
The WEA Filed A Lawsuit Claiming The EO Violated The Mineral Leasing Act, The Natural Environmental Policy Act, And the Federal Lands Policy And Management Act. “The Western Energy Alliance, a regional oil and gas trade group, filed a lawsuit in the U.S. District Court for the District of Wyoming challenging the EO on grounds that it violates the Mineral Leasing Act, National Environmental Policy Act, and the Federal Lands Policy and Management Act.” [Natural Gas Intelligence, 01/27/21]
REALITY: Not Only Did Goldman Sachs Say The Outcome Of The 2020 Election Would Not “Derail” Their Forecasts On Oil And Gas Prices…
In October 2020, Goldman Sacks Stated That They Did Not Expect Their “Bullish Forecasts For Oil And Gas” To Be Derailed Regardless Of The Presidential Election Outcome. “Despite a grim demand outlook for energy as the coronavirus pandemic continues to weigh down the global economy, Goldman Sachs remains bullish on both oil and gas prices — regardless of the U.S. presidential election outcome in November. ‘We do not expect the upcoming U.S. elections to derail our bullish forecasts for oil and gas prices, with a Blue Wave likely to be in fact a positive catalyst,’ the bank’s commodities team wrote in a research note Sunday.” [CNBC, 10/12/20]
…An Oil Analyst Said It Would Be “Extremely Unlikely” For Any Single Political Decision To “Materially Affect Oil Prices.”
It Is “Extremely Unlikely” That Any One Political Decision Anywhere Could Materially Affect Oil Prices, “Marginal” Effects At Best. “But this vastly overstates a president’s power to control the cost of a commodity traded on a world market. Although a president’s actions — including Biden’s climate policies — can nudge the price of oil, the effect is marginal at best, experts say. ‘The scale of the global oil market,’ said Pavel Molchanov, an oil analyst at Raymond James, “is so massive that it would be extremely unlikely for any single political decision, anywhere in the world, to materially affect oil prices.” [Washington Post, 11/12/20]
REALITY: Any Effects Of Biden’s Executive Order Would Probably Not Change The Price Of Gas By Much.
An Oil And Gas Economist Said Gas Prices Would Probably Not Change Much Due To Biden’s Executive Order, As Prices Are Determined By Crude Oil Prices, Which Are Settled In The International Markets.
“What effect could this order have on consumers? Could gas prices change? Probably not much.”
‘Probably not much,’ according to [University Of Wyoming Oil And Gas Economist Chuck] Mason, the UW economist, said on Tuesday. ‘Gasoline prices are determined by crude oil prices, and crude oil prices settle in the international markets. So having a five to 10% reduction in crude production, you will not be able to see the difference in international crude markets.” [Casper Star-Tribune, 01/27/21]
As more API and Big Oil special interests’ rhetoric is revealed, follow Accountable.US research-based reports on the fossil fuel sector.
Big Oil’s Texas Deep Freeze Misinformation Two Step
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Rhetoric vs. Reality: Pausing Public Lands Leasing
Big Oil and Gas’s Rhetoric vs. Reality as Biden Admin and Congress Take on Cleaning Up Trump’s Toxic Legacy
Full Climate Risk Accounting Must Include Review of Big Oil’s Public Lands Leasing Financial Scheme