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

Republicans and Oil Proces

April 28th. 2006
Sent to but not published in the New York Times

Really these Republican Senators are flip-floppers of the first water (GOP Senators Hurry to Quell Furor over Gas, New York Times, April 28, 2006, page: A1).  For years they have been preaching the virtues of the discipline of the free market.

Now that the free market in energy has reared up and bitten them, they are singing a different tune: roll back or suspend gasoline taxes, government checks to consumers, and drilling in the miniscule oil reserves in the Arctic Refuge.

Unfortunately they do not propose repeal of the market distorting subsidies to oil companies, nor do they support better market distorting subsidies like those for the development of sustainable energy or improvements in mass transportation.

If we are to have market distortion, let us at least have the right kind of market distortion!