Yesterday congress voted to do something that they openly admitted will make no difference – stop filling the strategic petroleum reserve. How stupid do they think we are? They obviously take their constituents for fools.
Unwilling to adopt a rational national energy policy that would increase domestic supplies of energy and place downward pressure on gasoline prices, Congress is passing its time with unhelpful symbolic gestures. The House and Senate both passed bills Wednesday that would cut off the flow of oil to the nation’s Strategic Petroleum Reserve.
Rep. Joe Barton, previously known for coddling the energy sector and his indifference to air pollution and the need to promote conservation, was nevertheless absolutely on the mark when he called the resolutions “feel-good” legislation. White House spokesman Scott Stanzel is right when he said there is no evidence that ceasing to pump 70,000 barrels of crude oil into the reserve daily would bring down the price of gasoline.
AP:
Rep. John Dingell, D-Mich., acknowledged there was no guarantee that suspending the deliveries would lower gasoline prices, but declared: “Common sense would say not to take oil off the market during a time of record high prices.”
The Strategic Petroleum Reserve was created in the 1970s as a precaution against major interruptions of oil supplies. Today at 701 million barrels it has enough to replace two months of oil imports.
Only Sen. Wayne Allard, R-Colo., voted against the measure.
Bush has steadfastly refused to halt shipments of about 70,000 barrel barrels of oil a day into the Strategic Petroleum Reserve, a system of salt caverns on the Gulf coast. The reserve, created to respond to major oil supply disruptions, holds 701 million barrels and is at 97 percent of capacity.
“There is no evidence that (suspending shipments) will affect the price of oil or gasoline in a meaningful way,” said White House spokesman Scott Stanzel. He said the president opposes any congressional mandate to stop deliveries and believes Congress should focus on broader energy issues.
Stanzel and Bush are right: Suspending shipments into the reserve will have very little, if any, impact on gasoline prices.
Look at the numbers. On average, we pump 70,000 barrels a day into the reserve. Surely leaving that much oil on the market would reduce demand and prices, right?
Wrong. Seventy thousand barrels amounts to 0.35 percent of the 20 million barrels of petroleum we consume daily in this country. That won’t even dent prices.
The only rational argument in favor of suspending strategic reserve shipments is financial. If you believe the current price of oil is artificially high and will fall substantially, then it’s wise to suspend the reserve program and fill it later with cheaper oil.
On the other hand, if you believe the surge in oil prices is real and that prices will be higher five years from now than today, then we should buy that oil now, when it’s cheaper. And that’s the more likely scenario.
There’s also a third way of looking at it. If you’re part of a Congress that has done little to prepare the country for a day we all knew was coming, then voting to suspend the strategic reserve program makes sense because it lets you pretend to be doing something, even though you’re not.