Time To Tap The Strategic Petroleum Reserve As Pipeline Explosion Cuts U.S. Supplies

This morning we woke up to the news that a pipeline explosion at Clearbrook, Minnesota cut 1.5 million barrels day of Canadian oil imports. The explosion killed two workers and the price of oil catapulted near four dollars a barrel. The pipeline company said the fire is still burning. A company spokesman advised that "all lines are shut down until we can safely start up the system. At least one or two lines will be shut down for quite sometime."

With prices escalating nearly $4 dollars a barrel, or a transfer of wealth from American consumers to oil interests of some $85 million dollars a day (21 millions plus/minus daily oil consumption X $4) this oil supply interruption classifies as a national supply emergency. It is exactly why we have a Strategic Petroleum Reserve in place, and where release of oil to the market would abate the supply disruption caused by this event.

Will the administration, that is to say President Bush and Energy Secretary Bodman, do the needful, and immediately announce a release from our 750 million barrel Petroleum Reserve to compensate for the Canadian oil shortfall? It stands to reason that they should. But then again this is an administration so wedded to oil interests, they might well want to continue adding to the stockpile rather than releasing supplies to stabilize market disruptions. This, while American consumers, who paid for the Strategic Petroleum Reserve in the first place, continue to have their pockets picked. Here we have a real test of whether we have an administration wedded to national interests or oil interests first and foremost.

Comments

[zaza]

WRONG. WRONG. WRONG. Strategic reserves should only be used in the most dire of emergencies. This is not such an emergency. In fact if gasoline prices were to go up, that would be a good thing as it would get us to drive our autombiles less and perhaps start contemplating (and hopefully planning for) a time in the not so distant future when gasoline will become very scarce.

[mamacat]

Whether or not stabilising prices with the petroleum reserve is needed in this instance, that strategy was one which Clinton used successfully. Bush is more interested in helping prices spike, not stabilising them.

[Spookcatcher]

I smell a rat. Yes, let's dump our oil reserves amd make sure there is nothing left as a safety net inase this Administration does bomb Iraq, and the world unites against us. Or the world traders see us using our reserves and raise prices to $200 a barrel? At what price do we then replenish it, if we can ever afford to then in the future after that? Could be a the commentator has a dollar in the Market somewhere? I vote Nationalize all American oil holdings, and make them a utility. Telecoms too, or at least AT & T, so Americans throughout the country can finally get High speed Dial-up, like our competitor/allies have!

[eastearll]

The pipeline is almost back to full capacity and the price spike is over.

False alarm, will Raymond now apologize?

[eastearll]

The latest news is that the pipeline is already back to 80% and should be back to full capacity in a few days. Meanwhile the $4 spike has already come back down.

Thank You George, ya fixed it already.

But at least Raymond got a chance to bitch about Bush for a few seconds.

http://news.yahoo.com/s/nm/20071129/bs_nm/enbridge_fire_dc_29;_ylt=Ai8SP.8R2inqKu5RLgErqGEE1vAI

[BRUMALIA]

Oil interests as opposed to the national interests.

[Semaj51]

Just a thought, the broken pipeline will be repaired in a couple of days. How many days will it take to start recovering oil from the Strategic Petroleum Reserve?

[vipersdad]

Anyone who REALLY feels that the link between price and demand/supply follows any "free market" economic principles is woefully naieve.

This "market," as Mr. Learsy points out regularly is hardly "free" or "competitive."

Let the prices rise, and invest the money in the "Space Program" Equivalent effort targeted at alternative energy. Distributed Solar, Micro Wind Generators - both are viable technologies that are almost competitive dollar-for-dollar per kwh generated. Letting the "free market" operate in this space without government intervention has not worked.
The ONLY place where the government has spent significant $$ to date (WARS, Foreign Policy, Strategic Petro Reserve, R&D, etc...) is in the petroleum area. If you add those two areas of investment up and compare alternative investments against Petroleum based US Gov't investments, the difference is staggering.

This is NOT a free market - let's stop kidding ourselves that those principles even remotely apply here. Every day we avoid spending money on alternative energy sources, we risk losing the competitive edge to Europe, Asia or some other Geography.

[scooperss]

You said reason and bush in the same paragraph.
HAHAH

[Helpknot]

Well that nearly fouur dollar price spike did not last too long now did it?

[realitytrumpsbull]

How about 'time to park the fucking car'?

If you don't buy their crap, they can go
ahead and charge 53 billion dollars a pint
for it, and no one will really give a shit
about them anymore. Then, they have to find
day-jobs...

[olephart]

Cheney put a spending measure in the budget to ADD more oil to the reserve even though the advisors suggested waiting for the markets to fall. We are ADDING to the demand problem and causing prices to INCREASE but that is, after all, what this Administration is all about isn't it. Now what was all this nonsense about tapping the Strategic Oil Profits Reserve?

[FearlessFreep]

What if they release oil from the strategic reserve and prices continue to rise?

[MajorKong]

"Here we have a real test of whether we have an administration wedded to national interests or oil interests first and foremost."

Short answer - oil interests.

[Joeseo]

That test is over. $4 immediate hike proves there isnt any concern about the Reserve being released.

I will continue thanking my Conservative acquaintances for their support of the Republican Corporate pick-pocketing at the pump.