Super! Obama to release part of strategic oil reserves
posted at 1:10 pm on June 23, 2011 by Jazz Shaw
While everyone is briefly fixated on foreign policy questions following the president’s speech on Afghanistan, the White House quietly let slip that it was taking some action on the energy policy front. What’s that you say? Are they issuing new permits or easing EPA restrictions on exploration? No, no, silly rabbit. The president is going to dump off some of the strategic petroleum reserve.
Wary of a new surge in gas prices, the Obama administration has decided to release 30 million barrels of oil from the country’s emergency reserve as part of a broader international response to lost oil supplies caused by turmoil in the Middle East and North Africa, particularly Libya.
The release from the U.S. Strategic Petroleum Reserve will amount to half of a 60 million barrel international infusion of oil planned for the world market over the next month.
“We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” Energy Secretary Steven Chu said Thursday.
Well, that’s just fabulous, isn’t it? (By the way, is it too early for a martini?) The wapo gets one thing right in their coverage, noting that traditionally the release of SPR stores is done in times of emergency, usually when the flow of oil is abruptly and severely reduced. Typical examples have been when hurricanes mow through the off shore fields and shut down production for weeks or months.
So what is the emergency in this case, since Libya really doesn’t account for all that much of the world supply? The administration may have already given us a hint.
Republicans have repeatedly slammed President Obama over the unusually high prices, and Obama himself has noted his poll numbers appear to rise and fall with the price of gasoline. Many political strategists say that voter anger over near-record oil and gasoline prices could be a determining factor in the 2012 elections.
Oh, yes. We’re doing this in response to an emergency all right. The emergency is that the president’s poll numbers are tanking and angry voters don’t want to continue to lay out 1/4 of their pay check at the pumps. But rather than actually do something to speed up domestic production and make us more energy independent, let’s just flush away some of the reserve we might really need if the you-know-what seriously hits the fan overseas in the next 12 months. Simply fabulous.
API quickly came out with a response to this move, which was sent to Hot Air fresh off the virtual press.
The release makes little sense for American markets. Crude and gasoline inventories are above average, and crude and gasoline prices have been trending down for weeks, despite the loss of Libyan oil, which markets have already adjusted to. The SPR was intended to be used for supply emergencies. There is no supply emergency. We don’t know what impacts this might have on markets long term. But we could and should be taking steps that would increase our own production by 2 million barrels a day or more for decades, which is possible if the government would grant much greater access to America’s ample oil and natural gas reserves. This would do vastly more to help consumers, increase energy security, create jobs and deliver more revenue to our government. It’s action that would truly strengthen our energy future, not a temporary gesture that has no lasting benefits.
30 million barrels is about what our nation consumes in a day-and-a-half. 60 million barrels (the total IEA release) is well under what the world consumes in a day.
Bah. I’m off for that martini anyway. Discuss amongst yourselves.