Is It Time To Tap U.S. Oil Reserves?

Energy Secretary Tells Congress Dipping Into Strategic Reserve Won't Reduce High Gas Prices

(CBS/AP)  With gas hitting a new high almost daily, some members of Congress pleaded with the energy secretary to release the nation's 700 million barrel emergency stockpile, reports CBS News correspondent Nancy Cordes.

His response - that's not what it's for.

"The strategic petroleum reserve is meant to be there as a protection for the American people," said Energy Secretary Samuel Bodman.

"The American people right now are being tipped upside down at the pumps and having money taken out of their pockets," responded Rep. Edward Markey, D-Mass.

Bodman also told a House of Representatives hearing that he does not believe that rampant market speculation is causing record high oil prices that reached a record $135 a barrel. He said it is a matter of supply and demand that can be traced to essentially flat global production over the last three years.

Markey said he did not understand why President Bush is not releasing oil from the Strategic Petroleum Reserve to force down prices. "We have 700 million barrels ... that are ready to be deployed," said Markey.

Mr. Bush recently stopped putting oil into the reserve after Congress passed legislation to halt deliveries.

The stockpile, now 701 million barrels, "is meant to deal with ... the physical interruption of the flow of oil to our country. We don't have that issue today," he told the House Committee on Global Warming.

Markey said the release of government oil is justified because "we're in an economic crisis" as high oil costs are driving gasoline to $4 a gallon and increasing other costs.

Oil from the Strategic Petroleum Reserve, three underground salt domes in the states of Texas and Louisiana, has been used twice to respond to supply disruptions or the threat of such interruptions: Just before and during the first Gulf War in the early 1990s and in response to the loss of Gulf of Mexico oil after Hurricane Katrina in 2005. President Bill Clinton in 2000 made emergency oil available to relieve prices and Markey said prices then dropped 18 percent.

A series of dire reports about the world supply of oil are driving investors to buy, buy, buy. Just today, the Wall Street Journal reported that the international energy agency is set to predict a massive supply crunch if producers don't significantly boost their capacity within five years.

"There'd be a rapid sell off if at some point somebody believes that the assumptions underlying this speculative investment are wrong," Edward Morse of Lehman Brothers told Cordes.

Until then, Americans are left holding the bill.

"A barrel of oil has more impact on our everyday lives than any other product in America," said Jack Gillis of the Consumer Federation of America. "Almost everything we buy is going to be dependent on the price of oil in some way."

One example: After American Airlines announced a $15 fee for passengers to check their first bag, United Airlines said it might follow suit. While Southwest Airlines says - no way.

"This is just going to irritate your customers," Peter Goelz, an airline industry analyst told Cordes. "And I think with the airlines satisfaction at almost its lowest level there are some airlines that are going to think twice about this."

But with big airline fees and gas reaching $4 a gallon, a lot of travelers might think twice about leaving home.

[mcv57]

Yes, when the U.S. Corrupt Government and the RICH stop playing games; otherwise, it will only make matters worst - the lack of reserves will hyper-inflate oil prices by the profiteering government its bedfellows.

[tburzio]

"Strategic" is a military term. The oil reserves are there in case OPEC turns off our oil supply. It would keep food coming to the cities long enough for our military to do something about it.

[gce65]

YES! We should slowly, moderately release the oil reserves.

Also, I''d like to see ONE US-run state oil company enter the market. Operate it as a regulated business producing gasoline and diesel fuel with a goal of 5% above cost annual profit--a moderate amount. That would put pressure on Big Oil not to swindle the rest of us and give us a benchmark of what real cost plus 5% is.

[shanev137]

It''s actually time to nationalize all of our countries oil and take it off the market so it can''t be traded/sold to other countries at $130 a barrel.

[shanev137]

The solution is to pass a law that makes anyone who buys an oil futures contract in the commodities markets to actually take delivery of that oil and no be able to sell the contract for a profit.

The solution is so simple a child could figure it out.

It will never happen though because our president and congress are in bed with all theses super rich speculators who are running up oil prices.

[mygramma]

Markey is a blooming idiot. 700 million barrels in reserve ready to be released?? Released to where??? Refineries that don''t exist??? The oil companies have no incentive to increase refinery output or build new refineries. -- They make obscene billions doing what they are doing - laughing all the way to the bank.

Supply and demand my a$$.

[ioweign]

Is It Time To Tap U.S. Oil Reserves?

Is it time to Nationalize the US Oil Companies?

Watch the gasoline price drop...

[bohemianmob]

Markey is a blooming idiot. 700 million barrels in reserve ready to be released?? Released to where??? Refineries that don''''t exist??? The oil companies have no incentive to increase refinery output or build new refineries. -- They make obscene billions doing what they are doing - laughing all the way to the bank.

Supply and demand my a$$.


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Posted by mygramma

You are totally correct, refineries in the US are not having crude supply problems, so as you say, releasing this crude would have no effect as most refiners are running at maximum capacity.

[bohemianmob]

It''''s actually time to nationalize all of our countries oil and take it off the market so it can''''t be traded/sold to other countries at $130 a barrel.


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Posted by shanev137

Welcome to the U.S.S.A. you commie scumbag!!

[michellem99-2009]

I got the answer and I can blame
Bush
That illegal war/s
Car makers
Alying Asre to us and the world.
Bushed caused more problem.
A war over oil not terrior,
a barrel will go 150.
Any care to guess the price this summer
A gallion 5/6 dollars to fill yer car.
I don''t own a car..

[shanev137]

Posted by BohemianMob at 08:02 PM : May 22, 2008


B-Mob hates the idea of us being able to buy gas from our own government at cost.....which would be about $1.25 a gallon.

[bohemianmob]

B-Mob hates the idea of us being able to buy gas from our own government at cost.....which would be about $1.25 a gallon.


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Posted by shanev137

You are a moron if you think the gov''t will sell you anything at cost.

[shanev137]

Posted by BohemianMob at 08:10 PM : May 22, 2008

B-Mob, you would rather have our president and congress sell out to rich speculators at $130 barrel.

Who is the moron?

You sound like a little person to me.

[randynason]

Is It Time To Tap U.S. Oil Reserves?

It was time about six months ago. The government is late and short, as usual. If it spent less time worrying about cover-up and more time about prevention, we wouldn''t be here.

[bohemianmob]

B-Mob, you would rather have our president and congress sell out to rich speculators at $130 barrel.

Who is the moron?

You sound like a little person to me.


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Posted by shanev137


All of our politicians sold out a long time ago my friend.

[tracymoorgan]

Its a drop in the bucket. It wont affect gas prices. Election year politics.

[tracymoorgan]

New Jersey has gas 75 cents cheaper than California. That isnt because NJ is in the oil patch. NJ has no oil production. NJ has superior refinery capacity. Get on with the new construction.

[marilyn301-2009]

Why can''t we start drilling for oil in Alaska? Seems like the most intelligent "next step" for us. I know that we might have opposition from the environmentalists and possibly other special interest groups, but hey, standing on our heads with our money being sucked out of our pockets at the pumps isn''t too appealing either.

[sistatee-2009]

Actually, it''s time to just take the oil from the Arabs and tell them, "Sorry, we don''t need you any more. Enjoy your sand box."

[tawpdawg11]

Mr. Bush recently stopped putting oil into the reserve after Congress passed legislation to halt deliveries.

The stockpile, now 701 million barrels, "is meant to deal with ... the physical interruption of the flow of oil to our country. We don''t have that issue today," he told the House Committee on Global Warming.



As i''ve been saying.....no need to increase drilling or beg Saudis to pump more. Supply is plentiful. Stations are open and pumping like crazy from coast to coast, border to border and round the world.

[jlwesley]

If you want to stop paying so much for gas, first contact your congressmen and senators and tell them to authorize the drilling in Alaska and all offshore sites,
then authorize the expanded pumping from already existing wells, I have a friend with 4 wells on his property that is only allowed to pump 20 barrels per month from each.

Then instead of selling our Alaska oil to the Japaneses, tell them to buy elsewhere.

Then comes the really big problem, tell the tree huggers, other environmentalists and just plain people who don''t want a refinery on their doorstep that it is too bad but they have got it.

The problem that we have is not crude oil supply, the problem that we have is in buying refined products because we don''t have the capacity to refine the crude that we already have under our own ground, it is estimated that we need 27 new refineries to meet our own demands, until we put a crash program to build refineries, anywhere, anytime, we are going to continue to pay through the rear for fuel.

[tawpdawg11]

"Is It Time To Tap U.S. Oil Reserves?"


Not until full-scale rioting breaks out.

[sharncedar]

First we should have our state governments sell off our infrastructure to foreign countries - hey how about the first interstate freeway ever built route 76 in Pennsylvania? Oh, that''s right, governor Ed Rendell the Hillary supporter HAS ALREADY SOLD IT TO A FOREIGN COMPANY so I guess we can''t go there. Well, then,let''s use up that strategic reserve, and then sell some more future earnings of Americans, I know we can sell Citigroup, OH THATS RIGHt WE ALREADY DID. Maybe we can inflate the book value of homes, then get Americans to take out huge loans tapping out all their future possible pay increases for the next century based on the artifical fake home valuations, oh thats RIGHT WE ALREADY DID.

D@mn. Anything left to sell? How about sell our jobs to India? Maybe they''ll give us a few tanks of gas if we give them all our jobs? Don''t you dare tell me we already did ....

Does anybody want some American women for slave girls? Gotta love those Democrats, if it ain''t nailed down, steal it and sell it to foreigners.

[cfin5]

Even if the price was nominally the same, which I disagree that it would,.....I would feel MUCH better knowing that I''m using American fuel, produced by my fellow American workers, who spend their money in the American economy, who pay taxes to support America''s government, helping me to nourish and raise my AMERICAN FAMILY......Could I be any more clear than this? I mean, which country are you government officials working for anyhow? Do you think that just because us regular American workers regardless of party affiliation, who rarely have time or the media voice to say these thing,.....do not think about these things?

[tracymoorgan]

Canadian tar sands can be cost effective at $60/bbl. This could be an asset bubble. Like the dot-com boom/bust cycle, oil might drop fast and hard. Anyway the reserves dont affect the price at the pump.

[republic1776]

Our Government makes more in TAXES than the Oil companies.
TAX us more, have our farm lands grow corn, attach our food supply to oil too!

[republic1776]

700 million barrels "America stockpile"
What does this amount to, 3 days worth?
Futile!

[minnick8-2009]

The "reserves," we need to be tapping are our own resources. The U.S. needs to go full steam ahead on the development of any and all options we have at our disposal. We need electric cars, more solar energy dvelopment, nuclear power plants, off-shore drilling, Alaska drilling, development of Western resources and any other options America''s creative powers and energies can think up of which I may not even be aware. Our own policies of dependence on foreign oil is what has caused our "energy crisis." I''d like to know when we are going to wake up and take action. I live in a state that has enough fossil fuel to run this country for 300 years. Over the past 30 years that all attempts to develop resources have been quashed by liberals, I have hoped they would someday freeze to death in the dark. Unfortunately, we will all go with them.

[cbutler69]

Its time as stated that we start tapping our own resources here in the US. Long past due, we should never have let our country get so dependent on other countries for oil. The government was totally ignorant when it came to our resources. They have said there is oil under Colorado well lets find out if there is and use it. We dont need any more excuses get it done and now. The oil bosses are making millions each year and heaven forbid they retire and get and extra $50 million for sitting on their butts. Id like to make 2 million bucks a year for sitting on my butt, then they say they put all their profits into research and producton- what a lie. They need to take a cut in moneies and help us get the price of gas down instead of sitting there laughing at us and the government.

[shanev137]

All of our politicians sold out a long time ago my friend.

Posted by BohemianMob at 08:35 PM : May 22, 2008

---------

Does that mean the American public has to?

Should I just roll over like you and smile while I take it up the poop chute?

It''s time for people to get mad and start rioting in the streets.

We''re not gonna take it anymore.

Screw the politicians and screw the rich speculators who are oppressing us.

I may not be able to fill up my tank but I can still open my mouth.

[algoresarse]

Does that mean the American public has to?

Should I just roll over like you and smile while I take it up the poop chute?

It''''s time for people to get mad and start rioting in the streets.

We''''re not gonna take it anymore.

Screw the politicians and screw the rich speculators who are oppressing us.

I may not be able to fill up my tank but I can still open my mouth.

Posted by shanev137 at 11:44 PM : May 22, 2008
+ report abuse

******

riot my arse..you aint got the balls..try conserving instead..it is less work than a revolution..

[ubrew12]

Is It Time To Tap U.S. Oil Reserves?

Of course, for a country that''s lost all semblance of a ''can do'' society. Drill for oil in a major retreat against the philosophy that CREATED these United States. To give just one example: there''s enough power in ocean waves off 100 miles of California''s 1200 mile coastline to power ALL of California: the ENTIRE STATE!!!

Only a society completely in retreat from the ''can do'' philosophy that marked her first 150 years would look at that ocean resource, and see only OIL.

[algoresarse]

Only a society completely in retreat from the ''''can do'''' philosophy that marked her first 150 years would look at that ocean resource, and see only OIL.

Posted by ubrew12 at 11:47 PM : May 22, 2008
+ report abuse

*******

you forgot..the california LIBERALS you cannot even THINK of drilling oil..it blocks thier view of the ocean and it will kill some endangered arse tick

[ubrew12]

algoresarse said: "the california LIBERALS you cannot even THINK of drilling oil..it blocks thier view of the ocean "
Cute. But California already drills major-league off her coast. And ALL Californian''s agreed in the 1960''s that this needed to slow down: it was an eyesore. Still, they''ll probably have to open it up in the near future to more oil drilling.

My point was: a can-do society doesn''t just go with the obvious solution. This society HAS alternative energy resources it refuses to develop or fund.

[minnick8-2009]

riot my arse..you aint got the balls..try conserving instead..it is less work than a revolution
Posted by algoresarse

I grew up in a pioneer house, I have lived for years in this country with no car, and no television. I moved out of my post WWII house so that my daughter''s family could live in it, and I rent a low income apartment. I''m very grateful I can turn on electric lights, and turn up my thermostat. It is exciting to have a toilet that flushes, and running in the house. I''m also glad to have a computer. How much more conservative do you think I should become?

[minnick8-2009]

That''s running water in the house.

[shanev137]

Posted by algoresarse at 11:46 PM : May 22, 2008


After you bankrupt them, rioting will be all that poor people have left to do.

[tazmjam]

Reports from the Senate Subcommittee on Investigations done in 2006.



The Role of Market Speculation in Rising Oil and Gas Prices.

http://levin.senate.gov/newsroom/supporting/2006/PSI.gasandoilspec.062606.pdf


Excessive Speculation in the Natural Gas Market

http://hsgac.senate.gov/public/_files/REPORTExcessiveSpeculationintheNaturalGasMarket0.pdf

[tcoleman12]

The Dems want to put any bandaid they can on it except begin new drilling and building new refineries. I understand that would not be an immediate solution, but that would ideally get us pointed toward the edge of the woods.
Another means to get out of this is increasing nuclear power production rather than relying on fossil power. We can continue working on "green" energy and autos, but until then we need other solutions.

[minnick8-2009]

It is colder than February outside tonight; where is the global warming?

[sevenveils]

The volume of oil coming to the states has not decreased except briefly during hurricane Katrina. The price of oil has been sky rocketing because of speculation but more importantly because the oil producers raise the cost of oil and there is always someone there to buy it. Its a sellers market.
Using US oil reserves is not sufficiently large enough to impact producers into lowering their prices.

[mh4cbs1]

Drill for more Oil?

The Quick Fix. Got to have it -- got to get it. Just like the addicts we are. Got to have more. Build more Hummers, more SUVs, punp more Oil. Never mind the $100 BILLION in pure profits by the Oil Corporations. Never Mind the $600 BILLION spent already on our Iraqi Oil Grab based on LIES.

If we do drill in ANWAR, we get the same Oil that we could have saved by simply moving to more efficient cars. And what happens in twenty years when ANWAR is pumped Dry?? The Planet will be heating up faster than ever. We will have robbed ALL FUTURE generations of our planet the responsible use of this resource !

Just like our patheticly addicted corporate-run Nation to seek the Quick Fix. Give us our Hummers and give us More Cheap Oil - to hell with the planet and with the future. Give us a Quick Fix.....

[mh4cbs1]

Complicit Corporate Owned Democrats! Grow some backbone. Ask where the $4/gallon money is going! If it is supply and demand, then the Oil Corporations should be seeing LOWER profits as the cost of their raw materials (crude oil) increases.

But NO! For some strange reason, when crude oil skyrockets so does Corporate Profits! ($100 BILLION last year - about $1,000 per US family)

The explanation of course is that Once Again the American People are being screw*d over by Corporate America and their bought-and-paid-for-congress.

[shanev137]

You people are forgetting that the super-wealthy use crude oil as an inflation hedge. If you had as little as $10,000 in your bank account you could open a margin account on the NYMEX or CME and buy and sell crude oil futures contracts. And if you had enough money, you could buy so many it would actually affect the price of oil....all done on a computer screen without talking physical delivery of the oil.

[veteran72]

Is It Time To Tap U.S. Oil Reserves?

No, that was about $2 and .50 cents ago.....

[redena]

My children are moving back home with there children because they are working mimnom wage jobs and from the $750.00 dollars they bring home after taxes they spend half in gas gooing back in forth to work, that leaves them about $350.00 for rent, electric and the basices. How can they live? We have fuel all over the US, what happen to the fuel in west Texas, it''s not gone they just closed it down. Let''s start producing our fuel again so people can survive and and make jobs again. Other wise we will have more homeless and more crime, people are getting desepartate.

[kaffirboetie]

I don''t how Shanev37 estimates that the cost of gas should only be $1.25/gallon because a barrel of crude contains about 36 gallons and according to my math $130/36 equals about $3.6/gallon. And that figure ignores the fact that the gasoline yield from a barrel of crude is less than 30 gallons and costs about 20 cents a gallon to produce and distribute

[shanev137]

Posted by sillywilly4 at 01:19 AM : May 23, 2008

If there was a "real" shortage of oil you would see all these big oil companies scrambling to meet our current consumption rates. The would be spending massive amounts of money on drilling for more oil to meet current demand. The fact is that they are not. All you have to do is look at their profit and loss statements to know that their expenses are not increasing while they post record profits. So there is clearly no shortage of oil out there. This is a manufactured spike in oil prices done by a few handfuls of people who control -massive- amounts of money. Think about it. For instance, a pension fund manager at Morgan-Stanley who controls $500 billion in assets decides to go long on crude oil futures. Every other fund manager in the world has to go along with him if they want to make money. The same is true when he bails out of that position. Gold and crude oil are the only safe things left to invest in.

[shanev137]

Posted by Kaffirboetie at 01:32 AM : May 23, 2008

Your math was done using $130 as a price per barrel.

My math was done at the cost of nationalizing our countries oil, taking it off the market, refining it, and then having the consumer buy it back at the pump.

[shanev137]

Shaneve137, Then why hasn''''t the cost of gas in other countries gone up near as high as percentage as ours?

Posted by sillywilly4 at 01:44 AM : May 23, 2008


Because those countries have nationalized their oil supply. They use their own oil that isn''t traded on the world markets.