LiquidFork
04-25-2008, 05:43 PM
Nancy Pelosi Asks Bush To Stop Filling Strategic Oil Reserves (http://sayanythingblog.com/entry/nancy_pelosi_asks_bush_to_stop_filling_strategic_o il_reserves/)
We’re coming up to summer again, and that means high gas prices, so it also means that it’s time for liberal politicians to start pandering to citizens angry about high fuel prices with absurd and mostly economically-illiterate rantings about the oil market.
The latest target for grandstanding is the strategic oil reserve. North Dakota’s Senator Byron Dorgan has been ranting about this of late (http://sayanythingblog.com/entry/byron_dorgan_thinks_north_dakotans_are_stupid_when _it_comes_to_gas_prices/), now Rep. Pelosi is getting in on the action too.
WASHINGTON (Reuters) (http://news.yahoo.com/s/nm/20080424/pl_nm/usa_congress_spr_dc) - The Speaker of the House of Representatives on Thursday called on the White House to temporarily stop sending crude oil into the nation’s emergency stockpile.
House Speaker Nancy Pelosi told reporters she was calling on President George W. Bush to work with congress to find a way to “temporarily suspend” oil deliveries to the Strategic Petroleum Reserve. . . .
Pelosi said suspending deliveries would save drivers 5 cents to 24 cents per gallon at the pump.
As U.S. benchmark crude oil prices hit a record near $120 a barrel this week, the Bush administration insists that filling the reserve accounts for less than one-tenth of 1 percent of daily supply, and has no meaningful effect on prices.
The nearly 701 million barrels of crude oil stored in underground salt caverns in Louisiana and Texas are meant as a supply buffer in case of major supply disruptions like the 2005 hurricanes that hit the Gulf Coast oil patch. It was created by Congress in 1975 after the Arab oil embargo.
This is calculated to make it appear as though Nancy Pelosi and her fellow congessmen care about high oil prices, but really it’s just a bit of theater. If Pelosi and her fellow congressmen cared about lowering gas prices they’d cut taxes on fuel and oil producers and also allow for the expansion of oil production inside the United States. They refuse to do these things because they’re a bunch of big-government politicians and mask their refusal to take action with nonsense like this strategic oil reserve stuff.
Let’s keep in mind that oil flows out of the strategic oil reserve as fast as it flows in. Unless the size of the reserve itself is being expanded, the daily purchases of oil are done to keep the supply up as older oil in it is shipped out. Much as with any product, the reserves can only be stored for so long and need to be kept fresh. Thus some of the older reserves are sold to be used in the market while new reserves are purchased to keep the supply at the level mandated by Congress and the President (http://www.spr.doe.gov/dir/dir.html).
This means that the SPR’s impact on the market is essentially neutral. The Department of Energy lets as much out as is put in unless the overall size of the reserve is being expanded. But that isn’t happening right now.
Second, let’s also keep in mind that 70,000 barrels of oil is a drop compared to overall US oil consumption. Our country uses approximately 20 million barrels of oil a day. Even if that 70,000 barrels of purchased oil didn’t have a neutral impact on the market (as I just explained) it would still represent just 0.35% of overall oil purchases in a day.
For anyone to say that minuscule amount is driving up oil prices as much as $0.24/gallon of gasoline at the pump is not just inaccurate, it’s ludicrous.
But again, this is more about perception than reality for politicians.
We’re coming up to summer again, and that means high gas prices, so it also means that it’s time for liberal politicians to start pandering to citizens angry about high fuel prices with absurd and mostly economically-illiterate rantings about the oil market.
The latest target for grandstanding is the strategic oil reserve. North Dakota’s Senator Byron Dorgan has been ranting about this of late (http://sayanythingblog.com/entry/byron_dorgan_thinks_north_dakotans_are_stupid_when _it_comes_to_gas_prices/), now Rep. Pelosi is getting in on the action too.
WASHINGTON (Reuters) (http://news.yahoo.com/s/nm/20080424/pl_nm/usa_congress_spr_dc) - The Speaker of the House of Representatives on Thursday called on the White House to temporarily stop sending crude oil into the nation’s emergency stockpile.
House Speaker Nancy Pelosi told reporters she was calling on President George W. Bush to work with congress to find a way to “temporarily suspend” oil deliveries to the Strategic Petroleum Reserve. . . .
Pelosi said suspending deliveries would save drivers 5 cents to 24 cents per gallon at the pump.
As U.S. benchmark crude oil prices hit a record near $120 a barrel this week, the Bush administration insists that filling the reserve accounts for less than one-tenth of 1 percent of daily supply, and has no meaningful effect on prices.
The nearly 701 million barrels of crude oil stored in underground salt caverns in Louisiana and Texas are meant as a supply buffer in case of major supply disruptions like the 2005 hurricanes that hit the Gulf Coast oil patch. It was created by Congress in 1975 after the Arab oil embargo.
This is calculated to make it appear as though Nancy Pelosi and her fellow congessmen care about high oil prices, but really it’s just a bit of theater. If Pelosi and her fellow congressmen cared about lowering gas prices they’d cut taxes on fuel and oil producers and also allow for the expansion of oil production inside the United States. They refuse to do these things because they’re a bunch of big-government politicians and mask their refusal to take action with nonsense like this strategic oil reserve stuff.
Let’s keep in mind that oil flows out of the strategic oil reserve as fast as it flows in. Unless the size of the reserve itself is being expanded, the daily purchases of oil are done to keep the supply up as older oil in it is shipped out. Much as with any product, the reserves can only be stored for so long and need to be kept fresh. Thus some of the older reserves are sold to be used in the market while new reserves are purchased to keep the supply at the level mandated by Congress and the President (http://www.spr.doe.gov/dir/dir.html).
This means that the SPR’s impact on the market is essentially neutral. The Department of Energy lets as much out as is put in unless the overall size of the reserve is being expanded. But that isn’t happening right now.
Second, let’s also keep in mind that 70,000 barrels of oil is a drop compared to overall US oil consumption. Our country uses approximately 20 million barrels of oil a day. Even if that 70,000 barrels of purchased oil didn’t have a neutral impact on the market (as I just explained) it would still represent just 0.35% of overall oil purchases in a day.
For anyone to say that minuscule amount is driving up oil prices as much as $0.24/gallon of gasoline at the pump is not just inaccurate, it’s ludicrous.
But again, this is more about perception than reality for politicians.