As I have called on before the US Senate voted today to stop filing the Strategic Petroleum Reserve until the price of oil drops to $75 per barrel. The vote in the senate was 97-1 and the vote yesterday in the house was 385-25 in favor. Although the administration opposes this measure the votes constitute a veto proof majority. It does concern me a bit that the adminstration projects an image of being out of touch with the average American struggling with high oil prices.
We need to take this one step further. We need to begin selling some of the 709 million barrels currently in the SPR in order to increase supply. This at least could be done during the summer driving season. The proceeds from the oil sale would offset the lost revenue from the gas tax holiday. We should sell 1 million barrels per day until the price drops below $100. Some of the oil was purchased when the price was below $15 per barrel. If and when the price drops below $75 we could return to filing the reserve. This is just good business sense but adds supply at a critical time. Maybe then we can get the attention of OPEC--proving that we mean business when it comes to increasing supply. Thus protecting our national economic interests.
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2 comments:
Sen. Bell,
I disagree that we should sell oil from the SPR (although I don't have a problem with not filling it any further). The purpose of the reserve is to maintain enough oil to keep the nation and the military running in the case of some dramatic oil shortage. It was never intended to manipulate the price of oil to help folks fill their tanks.
Much of the increase in price is due to huge increases in demand from China and India and other emerging market nations. Their demand will only continue to increase. We should drill our own oil (30B barrels in Alaska) if we want to increase supply rather than threaten our national security by emptying the SPR.
Mike,
I agree we should drill in ANWR and off the continental shelf. Developing that drilling would take several years. We need a serious move toward energy independence and such sale would signal that determination.
The SPR was created in 1976 as a reserve against a hot war with the Soviet Union. Realistically war with a major nation is the only way to have a substantial interruption in supply. The largest distribution of oil from the reserve was for $17M barrels during the 1991 Gulf War.
Every other country in the world would use an asset like this for their benefit. We need to also. It also makes good business sense to sell high and buy low. Just sell at $125 and begin buying back at $75 or lower.
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