Geithner: Hey, who’s up for tapping the Strategic Petroleum Reserve?

posted at 1:20 pm on February 24, 2012 by Ed Morrissey

Last week, I predicted that if gas prices continued to escalate into the spring, we would probably see the Obama administration hint at a release from the Strategic Petroleum Reserve as a temporary intervention to avoid the political damage of high fuel costs and their multiplying effect on the economy.  I was only off by a couple of months:

The Obama administration is weighing the circumstances that could warrant tapping the nation’s strategic oil reserve, Treasury Secretary Timothy Geithner said on Friday as he defended sanctions on Iran.

“There is a case for the use of the reserve in some circumstances and we will continue to look at those and evaluate that carefully,” Geithner said on CNBC television.

A handful of Democrat lawmakers have urged the White House to release some of the nation’s oil stockpiles to combat oil prices that are now topping $123 a barrel.

The SPR does not exist for the purpose of having the federal government mold the market price for gasoline.  It exists to allow the US to function in cases of massive disruptions in supply.  It is essentially a national-security program, not an economic program — which is why it’s curious that the White House had the Treasury Secretary floating this notion today.  That should come from the Department of Energy, not Treasury.

Having Geithner broach this notion exposes Obama’s desperation.  He’s going to abuse and manipulate a key strategic asset for an extremely short-term boost to his electoral chances, by making the economy look better than it really is.  It’s not the first time he’s done so, either.  Obama engineered a release from the SPR early last summer when prices started going up rapidly after the impact of the Japanese tsunamis started to lessen.  How did that work out?  As well as expected; prices rose back to the same level within two weeks of the release:

Crude raced higher Tuesday as energy bulls pushed Nymex oil back toward the $100-a-barrel mark, prices last seen before world governments said they would release crude from their reserves last month.

West Texas Intermediate jumped 2.1 percent to $96.89 a barrel on the New York Mercantile Exchange, decidedly above the $94.45 close of June 22, the day before the announcement on the release of 60 million barrels from reserves.

Brent crude on the ICE futures exchange finished $2.25 higher at $113.63 a barrel, and just below the June 22 high of $114.21. Brent touched $114.44 Tuesday. …

On June 22, the day before the announcement by the International Energy Agency that crude would be released from strategic reserves, it was at $95.41. It hit a low close of $90.84 on June 27.

Within six weeks, gas prices had gone even higher.  That’s because a one-time release of oil equal to the US demand for less than two days does nothing to change the market dynamics of supply and demand over any significant period of time.  Obama has steadfastly refused to put more supply on the market in the long term by opening up American domestic extraction and refining, which is why he’s having to fall back to another pointless Hail Mary so soon after his last attempt failed.

The failure to understand supply and demand is evident from this chart, developed by Speaker John Boehner, which matches up the average price of gasoline over the last three years to the steps taken by Obama to block America from increasing its production:

That will be the record Obama has to defend, and which he hopes that an SPR release will keep on the back burner.


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Awesome idea! Then we won’t have the petroleum we need when the SHTF in Iran – which is what it was designed for (i.e., emergencies).

Another expedient douche-tastic idea to buy some more time on the inevitable. Who’d a thunk it?

Mr Galt on February 24, 2012 at 3:15 PM

Ok, help me out here: Why is Geithner having any say in this?
Are we printing oil on our money now? Is that how we’ll bring back the value of the american dollar? Soak it in strategic oil?

askwhatif on February 24, 2012 at 3:27 PM

Hey who’s up for paying their taxes? I can’t help but wonder that if all the tax evaders like Geithner (and a few in Congress) actually paid theirs it would far surpass what Ogreedy wants to collect from his so-called rich. And Geithner could not only get the price of gas reduced but could also get wads more cash in his treasury if he’d convince Obutthead to issue drilling permits, allow oil exploration and fracking, and approve the Keystone Pipeline.

stukinIL4now on February 24, 2012 at 3:40 PM

It is not the supply of oil that drives the prices up in the summer. It is the special addatives to fuel, the lack of refining capacity to meet summer driving demands and so forth.

astonerii on February 24, 2012 at 3:44 PM

That should be good for about 5 minutes worth of daily driving. Then when the price goes down, Timmy can replace the SPR they used to buy a few votes. Is this even his job? Where’s the Sec of Energy, on vacation?

Kissmygrits on February 24, 2012 at 3:54 PM

It’s not the supply of Oil. The value of oil hasn’t increased. What’s happened is the VALUE of the dollar has decreased – thus it buys less oil which means you pay more for it.

Wake up

MoreLiberty on February 24, 2012 at 1:23 PM

Try as I might…I could not find any indication of sarc here…

This has to be the….Christ..I can’t even come up with a good adjective to describe it…most ignorant thing I’ve ever read..Liberal4life posts not withstanding…

BigWyo on February 24, 2012 at 4:35 PM

It’s not the supply of Oil. The value of oil hasn’t increased. What’s happened is the VALUE of the dollar has decreased – thus it buys less oil which means you pay more for it.

Wake up

MoreLiberty on February 24, 2012 at 1:23 PM

Try as I might…I could not find any indication of sarc here…

This has to be the….Christ..I can’t even come up with a good adjective to describe it…most ignorant thing I’ve ever read..Liberal4life posts not withstanding…

BigWyo on February 24, 2012 at 4:35 PM

Actually, oil is priced in dollars. The initial comment above sounds quite strange, but it is economically accurate.

While tensions and drilling moratoriums are a factor the price of oil, the most important day-to-day factor in the oil price -absent a major disruptive event – is the value of the dollar.

cane_loader on February 24, 2012 at 4:40 PM

While tensions and drilling moratoriums are a factor the price of oil, the most important day-to-day factor in the oil price -absent a major disruptive event – is the value of the dollar.

cane_loader on February 24, 2012 at 4:40 PM

And so…. The Won is screwing us from both ends.

His insane deficit spending is driving down the value of the dollar – raising the price of oil…. all the while his moratoria pinch the supply….. AND, he refuses to get tough on Iran, making war more likely.

I’m not sure it’s clear to the majority of Americans that 0bama is taking those three SEPARATE but CUMULATIVE actions simultaneously… thus ensuring an artificially induced rise in prices.

You’d think that the guy doesn’t want to get re-elected. Either he’s really dumb, or he’s setting up an oil crisis for his own purposes…. such as putting pressre on Israel not to do anything during a time of high prices to make things worse… long enough for Iran to develop a deliverable bomb.

See how this works?

cane_loader on February 24, 2012 at 5:03 PM

Excellent Idea! Iran’s close to coming under attack and is practicing sinking ships in the strait, and doofus wants to lower our strategic petroleum reserves. Brilliant!

elfman on February 24, 2012 at 5:10 PM

How about tapping the freaking ground, you jackass?

PalinLover on February 24, 2012 at 5:11 PM

The hike in gas prices isn’t all due to the supply problems. Part of it is due to the fact that the Obama administration is quietly creating money out of thin air again — in other words, devaluing your dollars. The dollar is worth less, so the same amount of gas costs more.

hachiban on February 24, 2012 at 5:11 PM

Besides the idiocy of Geithner’s saying that the rich should pay more taxes for the privilege of being American, his buddy Bernanke thinks that inflation means growth.
http://www.marketoracle.co.uk/Article33305.html

BTW Did Geithner ever pay his overdue taxes for his “privileges” How about Howard Buffett?

onlineanalyst on February 24, 2012 at 6:40 PM

Geithner should explain why tapping the Strategic Reserve would be a better solution to the problem than Impeachment of Geithner and Obama.

landlines on February 24, 2012 at 6:50 PM

As Obama hectored just the other day; “THE AMERICAN PEOPLE AREN’T STUPID!”

(Of course his own presidency is a 52% refutation on that claim.)

profitsbeard on February 24, 2012 at 7:36 PM

What a shame that a more conservative country to our north doesn’t have oil that it wanted to ship to America via a new pipeline.

profitsbeard on February 24, 2012 at 7:38 PM

Since taxpayers paid for all the oil in the system, why on earth would we want to sell low just to turn around and buy high again? For all the good it does just take off 10 or 15 cents from the fed tax per gallon.

AH_C on February 24, 2012 at 7:53 PM

1) How much do we have currently in the strategic petroleum reserve?

2) Did we ever replenish the oil we took out of there last year?

Doughboy on February 24, 2012 at 1:51 PM

Strategic reserve capacity is presently a little over 700 million barrels. Present daily US consumption is about 19 million barrels. If my math is right the reserve is equal to a little over 30 days normal consumption. Don’t know if the reserve is at full capacity or not.

Oldnuke on February 24, 2012 at 8:09 PM

And so…. The Won is screwing us from both ends.

His insane deficit spending is driving down the value of the dollar – raising the price of oil…. all the while his moratoria pinch the supply….. AND, he refuses to get tough on Iran, making war more likely.

I’m not sure it’s clear to the majority of Americans that 0bama is taking those three SEPARATE but CUMULATIVE actions simultaneously… thus ensuring an artificially induced rise in prices.

You’d think that the guy doesn’t want to get re-elected. Either he’s really dumb, or he’s setting up an oil crisis for his own purposes…. such as putting pressre on Israel not to do anything during a time of high prices to make things worse… long enough for Iran to develop a deliverable bomb.

See how this works?

cane_loader on February 24, 2012 at 5:03 PM

In the late 90′s the Communist Party USA set up a web site. Most web sites in those days were still sorting out how and what to put on the page and CPUSA was no exception. Google was still just an idea and URL’s addresses were found in listing books or publicans, such as those I received as a Social Studies teacher.

At the time I was teaching one of my Government Classes. The CPUSA apparently saw nothing wrong with posting their unedited political platform, AKA agenda, on the web site. It was very clear on how they intended to use the new environmental laws to destroy the large corporations of our country; first by forcing them to install expensive anti-pollution devices then bankrupt them with cleaning up any environmental pollution that might have occurred in the past. The next part is the killer. Once the large corporations and their factories were shut down, they proposed that small local factories would them. I remember telling my students that they were nuts to think they could do that to America’s industries.

You can find their same platform today at the CPUSA page, but it is worded much more carefully and less is given away of the intent of its goals. “Anti-pollution laws” references have now replaced with the broader term of “Green Laws”.
If you compare Obama’s 2008 political platform, it is almost identical to the CPUSA’s

What Obama or more accurately, his handlers, are doing now is in line with the communists/socialist goals of creating a Socialist America. Those goals collectively are to destroy our nations ability to be a world power, both economically and militarily, while at the same time bringing the Republic into the fold of a socialist centralized government democracy structured after the European socialist system. To do that requires the Constitution as a document of law, be made irrelevant and dysfunctional in our modern times. Obama’s actions and comments have made it very clear that he finds the Constitutional constraints on his power to be too limiting. He has tested the reaction for ignoring the laws governing his power of office and abused those granted him beyond the intended limits. So far he has gotten away with everything he has done, limited only by the fact that he is not so assured of re-election as they planned. After the election, he will be free to take his powers further, make congress either irrelevant as the voice of the people, and the Constitution meaningless.

Obama is clearly a socialist, and he really could not be anything else having been raised by a communist grandfather, mentored by Frank Davis of the CPUSA, associated with the most radical socialist, communist, and terrorist, employed by communist and socialist organizations and unions, supported by the Socialist party New Party when he entered politics, and the list goes on. His goal is to make Michelle proud, his grandfather proud, his mentor proud and all those who have supported him, proud that he full filled their HOPE and CHANGED America into a Socialist state.
What does the CPUSA get out of this? As Karl Marx said; Socialism is necessary as the middle transition from Capitalism to Communism. It succeeds by failing as an economic policy that can only be contained and managed by direct control of the government over all means of production and needs of the people. That is the role of a communist government where power is retained and passed on by a few elite members of the party.

Franklyn on February 24, 2012 at 11:34 PM

Geithner removes all doubt that not all clowns are funny.

volsense on February 25, 2012 at 5:33 PM

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