August 31, 2005
Don't tap oil reserve yet
Even if gas prices hit $3 per gallon after Katrina, President Bush should not tap the Strategic Petroleum Reserve. The immediate problem will not be a shortage of oil; it will be a shortage of ways to get oil to Gulf coast refineries and turn that oil into gasoline.
On Tuesday, President Bush reportedly was thinking about releasing some of the oil from the reserve. At this point, it's a bad idea, as it was a bad idea in March 2004, when oil was at $35 a barrel -- about half what the price is now -- and Americans were complaining. It was a bad idea in 2002, when a strike stopped oil production in Venezuela. And it was a bad idea in September 2000, when President Clinton did release oil from the reserve to lower winter heating bills as Al Gore was running for president.
More than 600 million barrels are stored in salt domes along the Gulf of Mexico. The reserve is part of the energy network centered in Louisiana and affected by Katrina. It provides about one-fourth of national supply. The reserve can hold up to 727 million barrels. America's diet is about 20 million per day.
The reserve exists for use during a supply emergency, such as the 1973 Arab oil embargo that led Congress to create the reserve. Long-term, more helpful would be a stable Iraq, where sabotage does not disrupt oil exports, and faster reconstruction of the country's petroleum system. Also, Mr. Bush could get serious about increasing fuel efficiency of the American car and truck fleet.
As damage assessments come in, the case for taking oil from the reserve may be more persuasive. It should happen only if there is a post-Katrina supply emergency.
Posted by Opinion staff at August 31, 2005 1:51 AMThe Post kind of glosses over the oil supply problem with the rigs in the Gulf shutdown, the major oil importing port of New Orleans shut down, and the vast pipleline network emanating from Lousianna also on life support with no electricity not to mention damage from the hurricane.
We also have, and have had for years, a major refining constraint and now we have lost a lot of refining capability in Lousianna.
We need to determine if our remaining refining capability will be limited by lack of crude. Between the government and the oil people, that question will be answered.
I hardly think anyone involved in that decision will care what the Post thinks. Credentials?
Rick
Posted by: Rick Caird at August 31, 2005 3:07 PMGasoline prices, and soon to be felt fuel oil prices, are forcing our citezenry to realize the consequences of political stupidity.
The inevitable law of supply and demand drives the cost of crude oil.
SUPPLY: Had we opened up more drilling and refinery production in the '70s instead of imposing an "Obscene Profits Tax" on the people who buy gasoline, we would not be where we are today.
Increasing supply is our most immediate means of eventually dropping fuel proces.
DEMAND: Reducing demand via alternative fuels and more efficient usage of available fuels is the long term solution to the energy problem. The ever-popular SUV has got to be the absolute dumbest thing our public has embraced with its total disregard for fuel economy. What price gas will it take to slay the gas guzzling dragons?
More sensible traffic control can go a long way to improving the damand side of the equation. It is not just the time cars sit idling or slowing down for speed bumps, it is the acceleration back to normal speed that spills tons of unnecessary polutants into the air and eats up a whole lot gas in the process. Of course we must have red lights, stop signs and speed bumps - otherwise it would not be safe for our children to play in the streets.
Let us not forget how much of that price per gallon goes directly into government treasuries. It's not just for roads and highways any more. It goes into the general fund, and the only alternative left for road construction and highway maintenance is toll roads!
Posted by: John Chase at August 31, 2005 3:52 PM
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