So I was watching his press conference the other day and this topic came up. Durbin calls on Obama to tap Strategic Petroleum Reserve; GOP leaders balk - TheHill.com Any thoughts? Does anybody know how much is actually in the reserve?
Damn, that stuff is supposed to be for emergencies and wars and shit. Edit: Oh yeah that's right, Obama is up for re-election.
He said it's a good chance of it happening if gas prices keep rising the way they are. Wouldn't surprise me if they tap into it and only mark gas down a few cents...
It IS an emergency. Gas going up much higher will really throw a monkey wrench into our economic recovery.
yes lets put a band aid on a wound that requires stitches >< tapping the reserve is short term relief but not a solution
Something I've always found weird in the Strategic Petroleum Reserve act is the Second Sinai Widthrawal agreement. Struck me as odd when I was reading through it. Anyway... There's 727 million barrels in there. That's supposed to be for crazy situations where its an actual emergency right? Like crazy catastrophic war right..?
Coming from the one with obama facepalm in his sig Nah if that happens don't worry the US WILL go take some oil. Good and bad thing for us
Tapping the oil reserve is a bad idea. First, the SPR doesn't contain gasoline or diesel. It contains crude. So in order for it to affect prices, you'd have to assume that what is making prices rise is disruption in crude production. It is not. Other OPEC countries have increased production to offset the loss in production in Libya. There is not diminished production at this point. What's making oil prices go up is fear and speculation. If there is a bottle neck in supply that's causing oil prices to increase, it's at the refinery level. And any oil that we release from the SPR will have to go to the refineries before reaching (and subsequently easing the cost on) the consumer. So if there is a bottleneck, the oil coming from the SPR will face the same bottleneck. Additionally, oil is a global market. Much of the oil we drill up in the US goes elsewhere, while at the same time much of the oil we consume here comes in from other places. If crude prices go down here compared to the rest of the world (because the Government floods the market), then the oil companies will just import less and divert more to other places where the price is higher. This is the same fallacy that exists in drill-baby-drill. Increased production or supply here only helps prices here in the same proportion that it helps prices globally. So in order to lower the cost here 10%, we'd have to increase GLOBAL supply by a commensurate amount - which is even more difficult that just increasing domestic supply by 10%. And finally, the oil that we release from the SPR will just be like a gift to Big Oil. It will still go through their refineries and sold at their gas stations - as the US doesn't have any Government owned facilities to process or distribute the oil. So it's no guarantee it will have any positive affect for the consumer, it may well just increase profit for the oil companies for a few weeks or months. And then, at some point, the Government will just have to buy more crude from the oil companies to replenish the SPR supply. So we'd give them billions of barrels of crude to refine and sell for a (currently inflated) profit, then buy it back from the again at a profit at some point in the future. Having said all of that, the THREAT of the Government tapping the reserve may have a positive affect (from the point of view of the consumer) on the fear that is driving oil prices up at the speculator level. Because that fear that is driving up prices at the crude-speculation level is irrational and not really tied to reality. But, perhaps paradoxically, the actual act of tapping the reserve would have little affect on actual prices.
Lol. This isn't an emergency... USE THE BUS! We'll be giving oil companies tons of oil... so they can drop the price by maybe 5 cents? They'll have record profits, non taxed. Let them gouge us, they say.