Number losing unemployment benefits



Paperblog

Sunday, April 1, 2012

Draw Down Oil Reserves

So the US and Europe are considering releasing oil from the strategic reserve in order to cut gas prices (Global Agreement Said to Be Near on Drawing From Oil Reserves. New York Times, March 30, 2012: B1, B6).

To do this would be sheer madness!

If gas prices were at European levels -- due to high taxation -- there might be a weak case for doing so.

But look at the purpose of the reserve: it is to ensure that the US will have sufficient oil if there is a constriction in overseas supply. If the Straits of Hormuz are closed so that imports from the middle east dry up, then that is the time to release oil from the reserves.

To release oil as a price stabilizer would put us in danger of an oil famine if the Straits were to be closed in the future.

To release oil as a price stabilizer would be to pander to the worst instincts of Americans -- very few of us are willing to make a sacrifice any more. We wouldn't even accept tax hikes to pay for the Iraq war.

This unwillingness will lead to our passing on an impoverished America to our children.


Sent to New York Times

1 comment:

Milan said...

"If gas prices were at European levels -- due to high taxation -- there might be a weak case for doing so."

I think the stronger case is actually to drive oil prices up to European levels (at least) with higher prices.

First, drivers do not pay the full cost for the many harms associated with their current mode of transport. Cars have done everything from contributing to climate change to worsening urban air quality to ruining the design of cities for pedestrians.

Second, we should be phasing out all fossil-fuel powered vehicles. Higher gas taxes would help, and private cars are the easiest form of transport to replace.