All that oil, and no place to go

“With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,” President Obama has said. “Not when we consume 20% of the world’s oil.”

How true is that? Not very.

The figure Obama uses — proved oil reserves — vastly undercounts how much oil the U.S. actually contains, Investor's Business Daily explains. In fact, far from being oil-poor, the country is awash in vast quantities — enough to meet all the country's oil needs for hundreds of years.

The U.S. has 22.3 billion barrels of proved reserves, a little less than 2% of the entire world's proved reserves, according to the Energy Information Administration. But as the EIA explains, proved reserves "are a small subset of recoverable resources," because they only count oil that companies are currently drilling for in existing fields.

All told, the U.S. has access to 400 billion barrels of crude that could be recovered using existing drilling technologies, according to a 2006 Energy Department report. When you include oil shale, the U.S. has 1.4 trillion barrels of technically recoverable oil, according to the Institute for Energy Research, enough to meet all U.S. oil needs for about the next 200 years, without any imports.

To be sure, energy companies couldn't profitably recover all this oil — even at today's prices — and what they could wouldn't make it to market for years. But from the industry's perspective, the real problem with domestic oil is that the government has roped off most of these supplies.

"This is not a geological problem — it's a political problem," said Dan Kish, senior vice president for policy at the Institute for Energy Research. "We've embargoed our own supplies."