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Obama Taps Oil Reserves

The Obama Administration has decided to tap into the nation's Strategic Oil Reserves to help reduce gas prices, which I complain about in a recent letter to the Los Angeles Times. The decision to release oil from our reserves is a very bad one that serves no purpose other than making it look like President Obama is doing something about America's energy woes. Initially the White House argued that the reserves were being tapped to offset a shortage caused by the Libyan Civil War-- this is a silly notion as Libya only produces 1.5 million barrels of oil a day and the vast majority of it goes to Europe.

The Strategic Oil Reserves are only supposed to be released in the event of a severe disruption in our oil supply-- events like Hurricane Katrina and the 1973 Oil Crisis are examples of appropriate times to release oil from the reserves. Rather than being a response to any real emergency, the Obama Administration's release of the reserves is just a ploy to gain some political goodwill. If they really cared about ending our woes at the gas stations, then President Obama and his allies in Congress would fix the problem they created with a moratorium on offshore drilling, end costly EPA regulations on refiners, and stop paying countries like Brazil billions of dollars to build up their oil resources as we just let our own sit unused. If they really cared about solving our energy problems they would get out of the way of market forces in order to allow entrepreneurs to figure out alternative energies and end subsidies giving an unfair market advantage to certain types of energy like ethanol. Rather than addressing the problem, President Obama seems intent on just punting it down the road like most of his predecessors, giving the appearance of hope for change but not actually delivering it.

Opening our strategic reserves does not help us at all; it only endangers us. Let us hope that a major supply of our oil does not fall prey to instability, terrorism, or nature in the near future.
Categories > Economy

Discussions - 2 Comments

Where was BHO when the price was over $4 a gallon? No, this is clearly a political move...he's worried about reelection, pure and simple. And he came to the same conclusion I did -- every time the economy recovers just a little, the speculators hop on the bandwagon and the price of crude kills the incipient recovery (although the economy has plenty of other problems preventing it from roaring to life, and his policies are one of them). But his prescription is wrong. Nothing short of futures reform is going to help this situation, at least so long as the global supply of oil is tight enough to allow such manipulation. This drink from the storehouse will not fix the problem.

"Where was BHO when the price was over $4 a gallon?"

On the golf course.

"This drink from the storehouse will not fix the problem."

Of course not. No one plays politics better than the bus driver does.

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