Tuesday, May 13, 2008

Wayne Allard finds a nut

From the Denver Post,

Sen. Wayne Allard was the only senator today to vote against forcing President Bush to halt oil shipments to the government's emergency reserve.

The Senate voted 97-1 in favor of the measure...

The vote directs Bush to stop shipments to the Strategic Petroleum Reserve through the end of this year, which would put about 70,000 barrels of oil into the marketplace.

Leaving aside the administrations arguments that the Strategic Petroleum Reserve is a vital national securing interest this bill represents nonsensical pandering on the order of the McCain/Clinton gas tax "holiday." The United States uses more than 20 million barrels of oil every day. Global demand is somewhere on the order of 85 million barrels of oil a day. This is a pittance. Far less than even a drop in the proverbial bucket.

It also ignores the fundamental economics of our current situation. Oil is not gasoline, it must be refined into gasoline. The oil companies insist that their refineries are operating at full capacity. Thus even with new oil in the market place the actual supply of gasoline cannot be increased. Without an increase in supply and a subsequent decrease in demand we will not see a drop in gas prices. There may be a very slight drop in oil prices but with oil at $126/barrel these 70,000 barrels a day are hardly enough to effect any real change.

No comments: