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Analysis: Obama Policies Making US More Dependent on Persian Gulf Oil

Excerpt: The Obama Administration is touting that our “dependence on foreign oil has gone down every year during the Obama Administration, including a reduction in net oil imports by ten percent—or one million barrels a day—in the last year alone.” While good news, this trend is happening not because of policies or actions taken by the Obama administration, but because of 1) a poor economy and high oil prices resulting in a lower demand for oil, 2) an increase in oil production on private and state lands (not federal lands) due to less bureaucratic red tape in leasing and permitting on private and state lands, and 3) an increase in biofuel (mainly ethanol) production due to the mandates from the Energy Independence and Security Act of 2007.

Actions the Obama Administration Can Take

Approve the Keystone Pipeline. Four years ago, TransCanada proposed the $7 billion Keystone XL pipeline to bring more oil from Canada to the United States. After years of study, the State Department has yet to decide whether or not to approve the pipeline. Because the pipeline crosses the U.S.-Canadian border, the State Department must decide whether the pipeline is in the “national interest.” Reducing our overseas imports of oil should be in our national interest as should be the pipeline’s economic benefits on both sides of the border. For example, its construction is expected create 20,000 jobs and states along the route are projected to receive an additional $5.2 billion in property tax revenue. U.S. companies are invested in Canadian oil sands and many of our businesses supply goods and services for the oil sands projects in Canada.

Canada has 175 billion barrels of proved oil reserves that can be produced now and moved to U.S. refineries via the Keystone pipeline. If the pipeline had been approved when submitted, more oil could be flowing into this country in the very near future. Canadian oil is a secure oil supply, as Canada is our friend and ally, and largest trading partner.

A recent study found that the U.S. could come close to producing enough new oil and natural gas to displace all non-North American imports within 15 years. The study, by energy consultants Wood Mackenzie, assumed oil drilling would be allowed off the currently prohibited areas of the East and West Coasts, in waters off Florida’s Gulf Coast, in Alaska’s Arctic National Wildlife Refuge, and on most federal public land that is not set aside where oil and gas or any commercial activities are generally excluded, such as in national parks and wilderness areas. It also assumed that permits would be granted to build pipelines to accommodate a doubling of Canadian oil production and the continuation of current tax rates for U.S. industry.[v]

The study found that if the oil industry was allowed access to the resources and the pipelines, domestic liquids production could reach 15.4 million barrels per day, close to the 19 million barrels a day that we currently consume, creating 1 million new jobs over the next seven years and 1.4 million by 2030. More than $800 billion in cumulative new government revenue could be generated by 2030 and $127 billion by 2020. Most importantly, no new taxes or increased government spending is needed to accomplish these results, just the opposite of the conditions the Obama Administration is promoting for green energy.


Oil imports from the Persian Gulf have increased significantly this year due to decreased oil production from the federal waters off the Gulf of Mexico, declining production of crude oil in Mexico and Venezuela, lack of pipelines to import more Canadian oil, and the configuration of Gulf Coast refineries to process heavy crude oils. The Obama Administration seems to be untroubled by this direction since it feels it can use the Strategic Petroleum Reserve in the event of a crisis. However, the Obama Administration can take positive steps now by approving the Keystone Pipeline, opening more federal lands to oil production, and creating an environment that promotes oil and gas drilling. Taking those steps, the United States could be almost independent of overseas oil within 15 years.