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Dems offer varying views on importance of oil supply

The Obama administration likes to boast about how much oil production has increased, even though it also argues that more drilling would have no impact on gas prices. 

As the debate over domestic drilling heats up in an election year, this potential disconnect is on full display. 

Democrats frequently argue that more oil production won't drive down prices. President Obama said recently that "we are drilling more, we are producing more. But the fact is, producing more oil at home isn't enough by itself to bring gas prices down." 

"So," says White House spokesman Jay Carney, "the correlation between greater production and the price is simply not there." 

Yet in other cases, Democrats seem to argue that oil supply does matter because they keep encouraging other nations to produce more -- and praise them when they do. 

That's what Sen. Chuck Schumer, D-N.Y., did when the Saudis agreed to increase production should sanctions on Iran cause a disruption in supply. 

Schumer took to the floor on March 14 to argue that "It is the best news on a very bad front -- that is, of rising gasoline prices -- that we have had in a very long time." 

The senator went on to say that the mere announcement by the Saudis had immediately pushed prices down. 

"Right after the Saudi oil minister made this announcement, prices dropped .6 percent. My belief is if the markets believe this is real, the price will come down significantly further," he said. 

As recently as last year, Obama himself seemed to be urging increases in supply, though not here in the U.S. 

He urged Brazil to produce more, promising the U.S. would be a good customer. 

In a news conference with the Brazilian President in Brazil, Obama said: "Brazil wants to be a major supplier of new stable sources of energy, and I've told her that the United States wants to be a major customer, which would be a win-win for both our countries." 

In addition to that, many Democrats are pushing the president to release oil from the Strategic Petroleum Reserve, a temporary way of increasing supply. 

The recent price spikes are attributable to a range of factors, including an improving economy and threats of disruption out of Iran. 

Some boil the cause down to this -- that the price of gas is rising because global demand is outstripping smaller increases in supply. 

"The reason (for rising prices) is a mix of voracious, relentless oil demand in fast growing Asia and the Middle East on the one hand, and disappointingly small net oil production growth on the other," according to testimony before Congress from Robert McNally of the consulting firm Rapidan Group. 

And the head of the American Petroleum Institute, Jack Gerard, argues: "We have choices. By increasing access to North American energy, we will help put downward pressure on prices." 

A closer look at the administration's claims about increased production indicate the president is actually reducing the supply of energy from federal lands, not increasing it, by reducing permits for drilling. 

According to the Bureau of Land Management in the Department of Interior, the George W. Bush administration increased permits by 116 percent. But under Obama, permits have dropped by 36 percent. 

And though the administration takes credit for increased production, 75 percent of it takes place on private land, while the areas under the president's control are now producing less. 

In fact, according to a March 20 report from the Congressional Research Service, production on federal lands actually declined by 275,000 barrels a day in 2011. 

That doesn't upset some of the president's congressional allies since they don't want more drilling.
Rep. Henry Waxman, D-Calif., argued in a recent hearing that "the Republican mantra is that we need to 'drill baby drill.'" 

"This slogan," he said, "may sound good, but it's based on complete fiction." 

Waxman tried to persuade the energy secretary to go along, asking him: "If we had more oil, and oil was priced at the world price, would that lower the world price?" 

Energy Secretary Steven Chu replied that, "The price of oil is very, very complex. It is certainly driven by supply and demand. It is also affected by, uh, uncertainty in the Middle East."

Jim Angle currently serves as chief national correspondent for Fox News Channel (FNC). He joined FNC in 1996 as a senior White House correspondent.

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