Tapping into the Strategic Petroleum Reserve would do nothing to solve the long-term crisis resulting from the absence of a sensible federal energy policy.
Published May 20, 2004
By most accounts, $2-a-gallon gasoline will be with us for a while, and few signs of inflation anger Americans more than paying for it at the pump. That has motivated some congressional Democrats to seek political gain by calling on President Bush to release oil from the nation's Strategic Petroleum Reserve in a desperate effort to drive down prices. To his credit, the president has refused, although it is one of the few sensible steps his administration has taken in an energy crisis that was long forewarned and is now upon us.
The reserve, nearing its capacity of 700-million barrels of crude oil stored in caves, is meant to be used in a national emergency. Filling the cavernous gas tanks of low-mileage SUVs does not qualify as one. Remember, the Arab oil embargo of 1973-74 led to the creation of the strategic reserve and is the kind of catastrophic event that would justify its use.
Yet whenever gas prices rise, politicians look to the reserve for instant gratification. Such was the case when Senate Democrats called on the administration to release 60-million barrels of reserve oil. Even Sen. John Kerry, who has said he is not ready to tap the reserve, has suggested suspending additional oil purchases for now.
That might be a politically popular thing to say, but it would do nothing to resolve the underlying problem - the world is consuming oil faster than new supplies can be developed. The United States has a particular problem: With our wasteful ways, we now have to import 60 percent of our oil, much of it from unstable countries.
It is not clear how Kerry would effectively address high gasoline prices, but it is evident how President Bush has failed to do so. His administration has refused to impose stricter mileage requirements on automakers and continued to hold out the false hope that an energy bill loaded with corporate tax giveaways is the antidote for high gas prices. The truth is, America doesn't have oil reserves significant enough to drill our way out of trouble. And the Iraq war has made matters worse, adding a "risk premium" of $4 to $8 a barrel to the oil price.
There is no easy answer. Nearly every oil-producing country is operating at or near capacity, and the growth of world demand, particularly because of China's economic vigor, is at a 16-year high. The one country that could boost supply - Saudi Arabia - offers high-sulfur crude that is not desirable in the marketplace.
Quick fixes, such as drawing down strategic reserves, are not the answer. The basic rules of supply and demand teach that Americans need to conserve if they want lower gasoline prices in the future. We know how to do it - through improved mileage, efficiency and development of alternative and renewable energy sources. The question is whether we have the will.