Bush diverting oil from reserve to pumps
President also orders investigations into whether industry is price gouging
Under pressure to do something about high gasoline prices, President Bush on Tuesday announced a series of measures, among them temporarily halting deposits to the nation’s strategic petroleum reserve to make more oil available for consumer needs.
In a speech on energy policies, the president added that he had ordered investigations into whether the price of gasoline has been illegally manipulated.
Probably a good move regarding the reserve, which should ease supply issues a bit and (more importantly) calm folks down a half-notch or so. The noticeable effect at the pump won’t be much to speak of, but it might settle futures prices a bit. Murdoc hopes that it’s only a short temporary halt, though.
Note that this is simply a move to stop adding to the SPR, not a move to pull oil from the reserve. That, in Murdoc’s humble opinion, would be a big mistake. Releasing a bit from the reserves in times of true crisis, such as the aftermath of Hurricane Katrina, makes sense. Trying to manipulate prices with it does not. The time may come when that reserve is our military’s lifeline.
I’ve been warning folks for years (long before I started MO) that we need to pump the reserve to maximum capacity, then expand capacity and pump some more. It’s for national emergencies and, though current high prices are a severe discomfort for citizens and businesses alike, they do not constitute a national emergency. Things are happening or threatening to happen that could cause an oil emergency like we’ve never experienced. That’s what the SPR is for, and don’t tell me that filling it and expanding it even during a time of high prices is an accident.
And get a load of the photo on the MSNBC story:
What is Ultra 93? Why do we need Ultra 93?
First, MSNBC obviously chose this photo so they could show us $3.289 gasoline. But they don’t point out that the highest-priced blend is almost a quarter-dollar above the Premium blend. $3.059 gas, while not terribly cheap, isn’t nearly as alarming as $3.289 gas.
Second, the photo illustrates a not-insignificant part of the supply-demand issue which is, in turn, a not-insignificant part of the current prices. Four blends of gasoline is at least two blends too many. Then consider the fact that different regions have different rules and the three or four blends in New Jersey (the scene of the photo) are different than most, if not all, of the three or four blends in California, Texas, and North Dakota.
At least Iowa has the grace to make one of its three blends a significant ethanol variant.
Two blends in any region max. A total of six or seven blends total nation-wide. This isn’t freaking Starbucks we’re talking about. Unlimited options aren’t making things better.
Need more blends? Make them different flavors of alternatives to nearly 100% petroleum gasoline. The article states that Bush is going to try to ease environmental restrictions, but Murdoc’s not holding his breath.
Regarding the price gouging probe: Yeah. Right. We’ll all be getting a check back soon for overcharges.