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“Release Baby Release” is the new “Drill Baby Drill”

“Release Baby Release” is the new “Drill Baby Drill”

Yes, “drill baby drill” will not increase the supply of oil this month, but if we had been drilling baby drilling the past two and one-half years, instead of stifling production almost everywhere, we would not need to be releasing our strategic petroleum reserves.  Via AP:

The Obama administration has decided to release 30 million barrels of oil from the U.S. Strategic Petroleum Reserve as part of a broader international effort to pump more 60 million barrels onto the world market over the next month.

U.S. Energy Secretary Steven Chu said the release of oil is a response to oil supply disruptions caused by turmoil in the Middle East and North Africa, including Libya.

The administration said the uprising in Libya has resulted in a loss of about 1.5 million barrels of oil a day. The release comes as the United States approaches a period of high energy use in July and August.

High oil prices have increased the cost of gasoline, contributing to an economic slowdown and putting increased political pressure on President Barack Obama.

Make not mistake about it, this is not just a reaction to the current market conditions, it is Obama’s policy to use the strategic petroleum reserves as a market cushion rather than extensive new drilling, as outlined during the 2008 campaign:

Senator Barack Obama altered his position on Monday to call for tapping the nation’s Strategic Petroleum Reserve to lower gasoline prices as he outlined an energy plan that contrasts with Senator John McCain’s greater emphasis on expanded offshore drilling and coal and nuclear technology.

In a speech here and in a new advertisement, Mr. Obama, the presumptive Democratic nominee, also sought to portray his Republican rival, Mr. McCain, as “in the pocket” of oil giants that are profiting from gasoline priced at more than $4 a gallon. And in his speech, Mr. Obama called for a windfall profits tax on oil companies to finance rebates for Americans.

While Obama proposed some new “limited” offshore drilling (video at 4:40), it was contingent on a comprehensive energy plan for so called alternative energy:

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Oil prices are coming DOWN, and the SPR has not yet been released. Common knowledge says that you do a release only when there is a)a national emergency or b) to force the price down. This 30 million barrel release is nothing more than show since the price of crude has already dropped about $15/barrel in recent days.

Why is it that this President seems to always be behind the times? As his popularity drops, it seems he is reactive, not proactive, and does things only for effect, not for a cure.

The EPA wants to shut down current oil fields in Texas over a lizzard, that just happens to be one of the favorite foods of the road runner. They are trying to stop the process of “fracking” that is a procedure that allows for the retrival of oil and natural gas previously not obtainable, claiming “fracking” affects ground water. The administration seems to not know that the process of “fracking” has been changed to be unharmful to ground water.

Yes, “drill baby drill” will not increase the supply of oil this month, but if we had been drilling baby drilling the past two and one-half years, instead of stifling production almost everywhere, we would not need to be releasing our strategic petroleum reserves.

Corollary: if we had released the reserves in 2008, we wouldn’t have any to release now, and releasing them now means that we can’t release them in some future date, in response to some short-term situation like a hurricane.

That said, pardon me if my economics are all wrong on this one, but “drill baby drill” will reduce prices now. There is a finite amount of oil in the world, and some of the price is based on the future price and availability of oil. On the extreme end, if we knew that oil would only last through the next five years, the price would be through the moon right now, accounting for that future shortage and thus extraordinarily high prices. Likewise, if American drilling will bring down the price of oil ten years from now because of increased supply, then the oil in the ground over in the Middle East is worth less than it used to be. Someone may well decide that it is more worthwhile to sell oil for $75 a barrel today, rather than keep in in the ground and sell it for $40 a barrel ten years from now. (Also, the time value of money comes into play; it’s usually better to have the same amount of money now than to get it later.)

If I may rant a bit, the “but drilling won’t bring down gas prices now” argument was used in nineteen-freakin-ninety-five. Had that argument been ignored then, as it should have been, domestic oil production would be much higher today. Can we not use some common sense and look at drilling now as a gift to our future selves? Or just understand that there’s finite oil in the ground, and American oil is coming up sometime, so why not now?

Roxeanne, you say there is a finite amount of oil in the ground. There are petro experts that debate that since the process that created the oil in the first place (as part of nature’s process) has not ended. There may be less, but it is not finite.

While this (dishonest) administration uses the 1.5 million barrels a day from Libya, it is a ruse, a scam, a falsehood. Libya sells most of its oil to China, not to us. On a list of the ten nations that the U.S. gets oil from, Libya’s not on it.

We get a good portion of our oil from #1, Canada, #2 Mexico and Venezuela. Other nations like Angola, provide some. Even the UK provides some. Yet we export our own oil to Japan.

Insufficiently Sensitive | June 23, 2011 at 11:16 am

This is the President of the United States, responsible for the safety and welfare of all citizens thereof, regardless of race, sex, political orientation etc etc. And he’s spending the strategic reserve to buy votes for his personal re-election?

Malfeasance doesn’t begin to cover such moral turpitude.

@ retire05. As you mention, a lot of the “peak oil” argument is debunked, even if crude oil is not produced in enough abundance “abiotically”, natural gas certainly is.

This recent oil release is nothing more than a feel good political “sugar high”.

retire05: um, yes, oil is continually being produced, and we are developing new ways of getting it out of the ground, but it’s still finite. It may be more or less finite than previously thought, and I’m not ever going to make the “peak oil” argument, but don’t tell an engineer that she doesn’t know the difference between finite and limitless resources. Oil isn’t water, which is virtually infinite since it is continuously recycled through the ecosystem. Thus, its price will always be at least somewhat dependent upon (real or perceived) future availability.

mgparrish, to assume that oil is an “infinite” product, one has to assume that the natural process that created that oil in the first place ended some millions of years ago.

And yes, we are the world’s leader in natural gas, another fossile fuel that has been attacked by this administration. Knowing that natural gas is abundant, especially in Texas, 47.7% of Texas power plants are now fueled by natural gas, 36.3% by coal (many of them retrofitted to clean coal use) and although we lead the nation in wind generated power, it represents only 4.4% of all electricity generated.

But that is not good enough for this administration. The EPA recently inflicted the coal burning power plants in Texas with such hard regulations that even the clean coal plants, with their 97% reduction in pollution, cannot meet those standards. A south Texas power plant just announced it will close and lay off hundreds of workers because it cannot afford the regulations imposed by the EPA, a bunch of unelected bureaucrats who are clueless.

Are we seeing Cloward and Piven put into practice on a national scale? It would seem so.

Roxeanne, to determine that oil is a finite resource, you must assume that nature ceased the process by which that oil was created millions of years ago.

Oil does not equal dinosaurs.

It doesn’t really matter whether oil is finite. There are potential replacements being developed. The real problem is the continual government tinkering is screwing up their development, and throwing them into these boom/bust cycles that bear no relationship to the actual difficulties in finding hydrocarbons.

[…] 3: Prof. Jacobson: “Release Baby Release” is the new “Drill Baby […]

Official Obama line, as reported by AP:

U.S. Energy Secretary Steven Chu said the release of oil is a response to oil supply disruptions caused by turmoil in the Middle East and North Africa, including Libya.

… the uprising in Libya has resulted in a loss of about 1.5 million barrels of oil a day … as the United States approaches a period of high energy use in July and August.

Response here at LI in political terms:

… this is not just a reaction to the current market conditions, it is Obama’s policy to use the strategic petroleum reserves as a market cushion rather than extensive new drilling, as outlined during the 2008 campaign:

Of course, part of the reason Obama was willing to make strong demands for releases from the strategic reserve during the 2008 election cycle, was that he knew the Bush Administration would not do it, thus putting his campaign in a position to blame increasing prices on the failure of the Bush Administration to listen to him.

The market effect of this current release is likely to prove very short-term, and we are likely to be back where we were pretty quickly. But that is NOT the issue for Obama.

So, to refine the point a bit, perhaps this release is intended as a public opinion test . . . far enough out from the active portion of the 2012 election cycle to give the Administration plausible deniability that the sudden release was and is predominantly political, but with enough punch to get a more accurate measure the practical prophylaxis effect of such a release in terms of a temporary tamping down consumer anger over gas prices.

After all, according to the American Petroleum Institute demand was down and supplies were up for May — there simply was no emergency prompting this response.

What prompted it? In mid-April of this year Obama himself told a group of his Hollywood-based top donors that oil prices were a central component of his popularity, and his perceived ability to manage the economy . . . in other words, to his prospects for reelection.

“My poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people,” he said.

Yep.

See also Jazz Shaw at Hot Air, here.

By his own admission, therefore, it’s the about the oil prices, stupid! I’d guess that if even a mere 2-3% of the voting public is intensely focused on too-high oil prices in a close election campaign in late October and early November of 2012, Obama loses.

So, my read on this oil reserve release is as follows:

“Testing, testing, one two . . . “

If I were Darrell Issa, I’d be preparing to start printing subpoenas for Chu, top DOE politicos and many others, including in the White House itself, much like the fed is printing money!

The interesting thing about Teh O’s decision to release stock from strategic storage now is the move is about four weeks too late to do much good. Which means he once again “dithered” away an opportunity to show leadership.

If O had moved when the market was at or near it’s peak the release could have logically mean credited with triggering the decline. But by itself the market corrected itself – in spite of the best efforts of the political class to prevent such an outcome. So this move was unnecessary. Another example of O burning Rembrandts to heat the WH.

Whoever still thinks he’s a genius needs to report back to their home village. They’ve all been reported missing.

I hereby declare Alaska and the Gulf to be our Strategic Reserve, and encourage Obama to “release” the tens of millions of barrels his administration has stoppered up through overregulation and outright lease theft.

So we get to replace $30 a barrel oil with $90 a barrel oil. Smart.

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[…] of you may have noticed that Obama decided to release 30 million barrels of oil from the SPR (Strategic Petroleum Reserve). Three links let you pick one […]

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