Friday, June 24, 2011

Has He Thought This Through?

Energy Secretary and Nobel Prize winner Stephen Chu dropped a little science on OPEC Thursday, announcing that America would try to devalue its pricey oil by unleashing 30 million barrels of its own via the Strategic Petroleum Reserve. Adding to its oomph, the move was part of a coordinated effort with US allies in the International Energy Agency, who are contributing another 30 million barrels themselves.

Chu said in a statement that they were tapping the reserve "due to supply disruptions in Libya and other countries and their impact on the global economic recovery."


Some left-leaning wonks agree there might be some modest stimulative effect to the move: a group of fellows at the Center For American Progress quickly put out a report likening it to a "tax cut for American families" that could save them north of $100 million a day at the pump. An economist at Moody's predicted brief economic gains as well.

But many experts and analysts are far more skeptical. Charles Ebinger, a fellow at Brookings who helped craft the original Strategic Petroleum Reserve in the 1970s, dismissed the exercise as a distortion of its original purpose that would bear little economic fruit.

"Gas prices have already been going down and the expectation is they would go down 15 to 20 percent just because of market forces," he said. "I hate to say it because I'm a supporter of the president, but I cant see it as anything more than a brazen political act to convince people he's doing something about gas prices."


Well, when you’re campaigning, you grab whatever you can and run with it, never mind whether it’s real or not. On the other hand, if prices are actually going down anyway without using up “our” oil, I wonder what credit/blame he’ll actually be reaping in the long run, considering he’ll be depleting our oil stores when there’s still oil to be gotten from the Middle East. (My baby brother knew how that works – he once asked our father to buy him a toy, and when Dad said, “You’ve got your own money,” he piped, “But I’m saving mine.”) People might just want to blame him for not having control of that Mid-East oil by now.

Speaker Boehner said in a statement that "it is good that the Obama Administration is conceding that increased supply will lower those costs. But by tapping the Strategic Petroleum Reserve, the President is using a national security instrument to address his domestic political problems."

Uh-huh. National Security.

If it’s a purely political move, it may not be the wisest one.

....but hey, do what you will anyway.

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