“Strategic” Oil Reserves

Funny, but the word strategic leaves me with the impression that the oil reserves would be used to avert a disaster, not to keep us paying $3 a gallon while the middle east has an upheaval.

Perhaps it’s time Congress codified the use of our oil reserves so that they can be reserved for ….well, let’s codify it….what do we want?

Use it during a sudden unexpected stoppage?
Keep it safe for during a shortage during an attack on US soil?
Open it up if a shortage is to be short term (ie big storms in Canada slowing down production) and prices have gone to $200/barrel at 2011 dollars?

We’ve been at $100/barrel before and yes we can do it again. Cripes it might even get the government more money as they collect the taxes.

Thank you to Energy Secretary Mr. Chu who says:

“We don’t want to be totally reactive so that when the price goes up, everybody panics, and when it goes back down, everybody goes back to sleep,” he said.

But maybe it’s time we wrote down when we actually want these reserves opened so that they can’t be used to save an election….

16 Responses to ““Strategic” Oil Reserves”


  1. 1 Morgan K Freeberg March 7, 2011 at 4:47 pm

    Perhaps it’s time Congress codified the use of our oil reserves so that they can be reserved for…well, let’s codify it…what do we want?

    Maybe that’s the only solution. But then again, what are we trying to achieve as we codify something? Stop the criticism (against conservatives)? Won’t work. And what codification will work for all scenarios, or at least is assured of not causing some big disaster by mandating via legislation some bit of nonsense that would have been easily sidestepped with a sensible executive running things?

    No, this is not the province of codes. It was built to be a tool brandished by the executive, to avoid situations harmful to the country and produce an outcome beneficial to the country. I do agree though that there’s some definition missing here that needs to be applied. Who’s supposed to benefit? It’s a national security tool, isn’t it?

    You know what I think should be done: Every time we have an election someone says “drill baby drill,” and then the democrats start in with that half-truth thrown around by Kerry clear back in ’04: There’s nothing up there, you’re stupid for thinking there is, if there was something it would take twelve years for it to appear on the market anyway, you’re stupid for thinking it would take any less than that, blah blah blah…

    So the solution is obvious. Congress should pass legislation authorizing the domestic drilling to replenish the SPR. Doesn’t matter what purpose we have in mind for the SPR, this would still be in perfect harmony with it. And then we don’t need to fight & argue about whether there’s something in the Bakken or in ANWR. We’ll know.

  2. 2 Terri March 7, 2011 at 6:30 pm

    There is a fatal flaw with your solution.

    Domestic drilling is done by domestic companies. They aren’t in business to stand by to fill the reserve.

    I’d be ok with having places like ANWR ready to go but in reality, once it’s drilled, it will be sold. No one is going to sit on it and during a deep recession, the government won’t be able to continue to pay for it’s set aside with it.

    You are correct about just maybe adding to the definition of what the reserve is for vs allowing the legislature to decide when to open it. Once again we get back to “do you trust this president?”. (whether the current one or the last one) In this instance, nope I don’t.

  3. 3 Morgan K Freeberg March 7, 2011 at 6:36 pm

    Not sure I follow. The SPRs are filled with crude that the government has been purchasing. Wouldn’t the ground be leased to the oil companies as exploratory leases, with the government paying fair market value for the crude, like they’ve done with the other assets in the SPR? Or are you saying there’s a problem in my plan because the companies would just sell to the highest bidder…

    If that’s the concern, the leases can be written to cover just about anything, just write it around that. Then the liberals can’t protest we’re filling up our Lincoln Navigators at the expense of the caribou’s mating habits, and they also can’t protest that we’re being shortsighted/stupid/whatever drilling on a resource that won’t produce an actual product for another decade — since that’s the whole point of the SPR, is to look down the road.

  4. 4 Terri March 7, 2011 at 7:52 pm

    The SPR’s are full now, I assume.
    So you lease ANWR to Exxon. But Exxon is supposed to explore it, prepare for future drilling and close it up for future needs? Who would do that? They’ll want to make money.

    So the US pays them every year for not selling results to the highest bidder. We don’t have the money for that either.

    I picture the SPRs as useful for a real disaster within a lifetime starting today. I picture ANWR and other pristine wilderness areas as being available to those 150-300 years from now. We don’t need it now. It’s good to keep it available for the future.

  5. 5 Morgan K Freeberg March 7, 2011 at 8:30 pm

    Yeah, I agree with you. It’s no different than, if my background is being screened for high-level clearance, and I’m sleeping with a whole bunch of married women at once, it’s going to become an issue. Why? Because it makes me a target for blackmail. A nation can certainly be blackmailed. “Let this terrorist go, or else we’ll jack up your crude cost to $300/barrel.” I see that as the purpose of having the SPR, when our dependency on this single commodity starts to entail a real national security risk.

    Regarding the financial issues with Exxon drilling in ANWR, I figure that’s just written into the lease. But what if it isn’t ironclad-tight? What if Exxon does want to sell to somebody else…the effect would be, then, that the cost of oil will go down domestically. Only if Sen. Kerry et al are mistaken…and they seem very confident. If they’re correct, on the other hand, then it won’t make any difference one way or the other. Exxon will drill, find not nearly enough crude oil to shove up a squirrel’s rear end, they’ll lose lots of dollars in the process and our libs will be happy. So who’d have a problem with it?

  6. 6 Terri March 7, 2011 at 8:47 pm

    All true. I just can’t imagine why a company would choose to explore without being able to profit from the exploration.

    As for the left, they want wilderness to remain wilderness.

    Similar to negotiating treaties with the Lakota to put them on reservations and agreeing to no white settlers right up until gold was discovered there. (based on an admittedly minute amount of historical knowledge) Congress signs off and say- yes, this wilderness will be kept wild for future generations to see and enjoy. Then gold (oil) is found and one more wilderness area is gone.

    Good comments. Thanks!

  7. 7 philmon March 10, 2011 at 3:31 pm

    Yeah, this is pretty much my thought on it, and it always has been.

    The strategic reserves are there in case we really can’t get any flippin’ oil, and we have to get a fighter jet off the ground or the President to a summit or something.

    Save it for that proverbial real rainy day. Otherwise, let the market do what it will, and let us all adjust to market realities instead of using it to put on temporary artificial market bandaid.

  8. 8 philmon March 10, 2011 at 3:57 pm

    You know, we have ways for wilderness to remain wilderness and still drill.

    Ask Mrs. Palin. She LOVES wilderness. She doesn’t want it to look like a big massive erector set with oil oozing out everwhere.

    We have the technology. This “no drill, nowhere, no-how” sh*t … it’s gotta stop.

  9. 9 Terri March 10, 2011 at 4:25 pm

    So you see no reason for actual “wilderness” to be set aside for an unknown future?

    You’re pretty certain that you can predict the future and what exactly people (be they children, or scientists or evolving animals or….) will need in the future that maybe just maybe should not be touched by humans in a major way?

    It’s not like Wilderness is all public lands. Wilderness is a special class unto itself and (like reservations) in many cases its junk land that government has already determined needn’t be used for anything else so lets just make this wilderness and throw the enviros a bone.

    “We have the technology. This “no drill, nowhere, no-how” sh*t … it’s gotta stop.” Does that mean every single place that exists?? I disagree.

  10. 10 Morgan K Freeberg March 10, 2011 at 5:24 pm

    Ah Terri, you’re breaking the “recognize as extreme that which is extreme” rule.

    There are just a few places where there is a potential to extract extremely large quantities of crude and natural gas. The “always” and “never” fall upon the know-nothing liberals like John Kerry who intone sonorously (after flying in to some spot on a huge jet) that we’ll probably not yield too much out of that spot, and heck, even if we did, it would take a decade before it appeared on the market and did anything to affect prices. And I’m not using “know-nothing” as an historical reference to a nineteenth century political party, or even as a put-down. I’m using it on purpose. They really don’t know what they’re talking about, and neither do I.

    And there point is we wouldn’t see anything for ten years — but twenty-five, thirty years later they’re still giving the same speech. That’s a problem.

    As I said: The “always” and “never” fall upon their position, not on Phil’s. Like I said before: Nobody ever wants to tell the tree hugging hippies no. About anything. Ever.

  11. 11 Morgan K Freeberg March 10, 2011 at 5:25 pm

    Gah. Broke the “their” rule myself. I’m not an educated man, but I’m smarter than that for cryin’ out loud.

    It’s time I got myself some coffee.

  12. 12 Terri March 10, 2011 at 5:55 pm

    No, I’m not breaking that rule. I am just trying to share that “Wilderness” areas are different than “National Forest” or “BLM” or “Open Space” or…….

    ANWR is designated “wilderness”.

    Because there is not peace in the Middle East and because this administration has refused new oil leases in the gulf and because gas is >$4/gallon should not mean that a national “wilderness” area needs to be sacrificed for the “greater good”.

    Actually – I just questioned myself to find out what ANWR stands for. It’s Wildlife Refuge. Same rules apply.

    A “Wildlife Refuge” exists to have some portion set aside specifically for “Wildlife”…
    I think it only fair that we keep it that way up until we are in something akin to grave peril. Not some discomfort.

    If we choose to open it up now for exploration because we are in discomfort and in 10-25 years we happen to be in comfort I have no faith that we’ll just set it all aside (see leases argument above) until grave peril comes into being.

    Keep that big ol potential oil field where it is. Let the bunnies run unobstructed. Dig around the edges and see what’s there if you must but what the heck is a wildlife refuge if not a place set aside for wildlife?

    I’m happy to tell tree hugging hippies “No” we are not going to change the Colorado Plateau into an untouchable area because now we know it’s full of fuel. But if it had been set aside as untouchable 20 years ago…it should remain so until that grave peril thing hits.

  13. 13 Morgan K Freeberg March 10, 2011 at 7:17 pm

    Well, I’m just pointing out Phil never said drill “every single place that exists” and I don’t know of anybody else who has suggested such a thing either. Quite to the contrary, a wildlife refuge can be created in all kinds of places. How come they have to be created wherever there’s a real potential for a domestic oil supply? Having a SPR is fine, but if we were to have a significant petroleum resource inland, then every single time some maniac in the Middle East went rattling a saber, thousands of jobs would be created over here. Wouldn’t that be nice?

    But if the “always/never” test isn’t good enough for figuring out which side is extreme, we could use the encroachment test, and figure out which side is moving. Again, it’s not the drill-here-drill-now folks; it’s the tree hugging hippies who nobody ever tells no.

    Twelve times the House has voted to open the 10-02 area of ANWR to exploration and 3 times in the Senate. In 1995 both bodies agreed to open the 10-02 and the issue would have been put to bed had it not been for President Clinton who vetoed the measure citing, “it would take ten years to bring oil to market.”
    :
    The original area, designated in 1960 by President Eisenhower as the Alaska Wildlife Range, only incorporated 8 million acres, making up the current central portion of modern ANWR. This “range” area centers on the Brooks Range Mountains and has, to this day, remained protected under “wilderness” designation as defined by the National Wilderness Act (1964). It is permanently off limits to any form of development.

    In 1980 everything changed with the passage of the Alaska National Interests Lands Conservation Act (ANILCA) which expanded the Alaska Wilderness Range area to 19.4 million acres and renamed it the Arctic National Wildlife Refuge or the modern ANWR we know today. 1.8 million acres were added to the north of the original Arctic Wildlife Range incorporating the eastern edge of the Arctic Coastal Plain and 9 million acres were added to the south to the border of the Venetie Indian Reservation of the Interior. ANILCA designated the original central Alaska Wilderness Range area as officially “wilderness”, and the new southern area as “refuge” land as defined by the National Wildlife Refuge Act, and defined the northern 1.8 million acre coastal plain addition as “an area set aside for the study of exploration of oil and gas”; neither refuge, nor wilderness, despite now being within a national wildlife refuge.
    :
    The ANILCA bill also gave a timeline for deciding the fate of the 10-02 in that it ordered the Dept. of Interior to conduct extensive study into the area and make a recommendation to Congress on its findings. This took place from 1981 to 1987 and culminated with a report to Congress by then Secretary Hodel who recommended that the 10-02 area be open to oil and gas exploration. Congress since then has wrangled with the issue yearly and the issue is still at an impasse today.

    In 1988 Congress added 325,000 acres to the south side of the refuge making it roughly 19.4 million acres in size and the largest wildlife refuge in America.

    See, there’s a history here of moving goalposts. The reality is one of politics: In these “post-Earth-day” times, politicians see it as a sure winning issue to say don’t-drill-here-don’t-drill-anywhere. It makes them look sensitive, like they appreciate and admire caribou & owls. Makes it look like they’ve been there!

    Just a few years ago, when the gas prices were starting to cause some real pain, President Bush signed an order removing some of our domestic drilling restrictions. This was never truly effective, as Congress would have had to follow suit. So not a single drop of oil hit the market as a result of this. And yet the oil & gas prices dropped immediately. That really should have ended once & for all the talk about “move along, no oil here, it’ll take ten years for it to hit the market anyway.”

  14. 14 Terri March 10, 2011 at 7:41 pm

    pretty much, that’s what Philmon said.

    “You know, we have ways for wilderness to remain wilderness and still drill. …..We have the technology. This “no drill, nowhere, no-how” sh*t … it’s gotta stop.”

    At least that’s what I get out of it. Since we “have ways”, we should go ahead and drill. I disagree.

    And now, your quote:
    “Quite to the contrary, a wildlife refuge can be created in all kinds of places. How come they have to be created wherever there’s a real potential for a domestic oil supply? ”

    This is a falsehood as you well know. ANWR was created where it was because no one ever thought anyone would give a rip about it and Congress could get hippy bona fides by creating such a large area. Wildlife refuges need to be where the wildlife will actually be. And it needs to be big enough to accommodate them if you want to be serious about it.

    And of course there is a history of moving goalposts. Here’s the goal…a refuge for wildlife. No, here’s the goal – cheap gasoline. No, here’s the goal – zero reliance on the Middle East. etc, etc.

    I suspect you are crediting me with arguments that I have not made. I don’t think we should not drill ANWR because it will take 10 years to get anything out of it. I think we should not drill ANWR because
    1) it’s currently set aside officially with a designation for wildlife
    2) we are far, far from desperate straights here. The market has yet to reduce people to buying tiny cars let alone affect the price of plastics to any extent.
    3) when that time comes it will be good to have on hand a) the reserves b) expensive stuff coming out the hard way and c) a big fat reservoir on lands that may take 10-20 years to get to.

    We are not near that now. If we were to drill in ANWR and find a grand deposit I would be willing to bet my right arm (yes, I’m left handed) that the goal post would move from “keep in tact for later” to “use now to keep people from rioting due to $6/gallon gas”.

  15. 15 Morgan K Freeberg March 10, 2011 at 8:04 pm

    Then how about whittling it down to the original 8 million acres, if it’s really all about protecting wildlife, and not about keeping the market price of crude oil artificially high.

    Yes I acknowledge you’re not among those who have engaged in the Bill Clinton argument of “but it’ll take ten years so let’s not even bother.” I’m just using that as a device to illustrate the incredible insincerity of that side. No, I am not willing to give them any credit at all. I don’t think they give a rat’s behind about snail darters, whales or anything of the like.

    The issue is not one of scarcity. It is an issue of market volatility and “soft,” by which I mean financial, terrorism. We are being subjected to a coordinated pattern of attacks that are market-based, and about half of our own politicians have demonstrated a persistent interest in undermining our independence. Now, do the caribou really need 19 million acres for their copulating? Something in the order of, say, 16 million would be grossly insufficient?

  16. 16 Terri March 10, 2011 at 8:21 pm

    And there you have it. It will always boil down to “who can you trust”?

    You don’t trust that anyone gives a rip about nature, they just want their way.

    I don’t trust either the American people, oil companies or current times to do what is best in the big picture for all parties including the animals (more than just caribou) and our future.

    You’re not going to get me to agree here, yet I don’t think you’re thoughts are not valid.
    Our own sources of oil can be found in non officially designated areas of our big country and needn’t cross over into other set aside spots in order to keep oil terrorism in check.

    I maintain that officially designated wilderness/wildlife set asides should remain so up until we are actually in or on the cusp of a national emergency. If you’re worried about the 10 year setup, then reserve what would be needed to deal with such a far away drilling expedition. Put the congressional stamp of approval on it “to be opened only to drill in ANWR” or other such paperwork that you think could be rock solid.

    With resources we have (including opening up more – since it’s available without getting into refuges) including shale/nuclear etc, etc we are not going to go under because a big reserve in AK won’t be available for 10 years.

    You haven’t at all addressed how a lease agreement is going to keep Congress/the people from deciding that $6/gallon is a national emergency that must be addressed now.


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