A caller to our Listener Comment Line recently suggested something: Why not release 100 million barrels or so of oil from the Strategic Petroleum Reserve, flood the market, and crash prices?
It’s an interesting idea. It certainly sounds satisfying to anyone who’s suffered at the hands of current fuel prices.
But, realistically, that will never happen.
The current administration is not only intent on filling the current reserve – they want to expand the capacity of the Strategic Petroleum Reserve by 300 million barrels of oil.
Our first step has to be to stop adding oil to this reserve. It is very close to its planned capacity – which means that it can and will serve its intended function: to preserve our energy security.
What concerns me now are two things:
First, I worry about the message we are sending to the world markets. A number of oil industry experts have said that continuing to add to the reserve sends a signal that the U.S. government expects a major disruption in world supply in the near future.
Why else would we add oil at the highest price in history? Wouldn’t a careful, prudent planner buy low and sell high? Isn’t that what they taught us in grade school?
Second, I’m concerned about not only our physical security, but also our economic security.
War is a crisis. That’s plain. But the Depression was just as big a crisis to this nation as any war.
I’m not saying we’re headed into a period like that. But I think any clearheaded person knows we’re in a downturn. I simply don’t see any reason to take actions that can only make it worse.
And that, my friends, is the only possible outcome of continued contributions to the Strategic Petroleum Reserve.
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1 comment:
The SPR isn't for protecting the energy securit of consumers. Rather it's to protect the energy security of or defenses.
Right now, the SPR has about enough capacity to cover about 90 days of military operations.
Considering that we are at war, and one that is expected to last longer than 90 days, and considering the fact that most of the instability we're facing is in or near the very regions that have major control over the world's oil supply, doesn't it make sense to continue filling the reserve and to continue to increase its capcity?
What a field day our enemies would have if they knew that we didn't have enough oil to support our military. Especially when they can turn the spigot at any time.
The more oil we have to run our defenses, the less likely they are to take drasic and scary actions, including shutting off our supply.
The SPR, therefore, actually serves to preserve our energy security. Take it away, reduce its capcity, or in any way hamper its ability to support our military, and oil prices, along with plenty of other things, will get worse, not better.
The supports holding up our nation's security are very fragile and very few at the moment. Let's not start chopping away at what's left.
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