Posted on 05/16/2008 10:19:25 AM PDT by Sub-Driver
US will stop sending oil into strategic reserves
By H. JOSEF HEBERT, Associated Press Writer 16 minutes ago
The Energy Department says it has canceled oil shipments into the Strategic Petroleum Reserve beginning in July when the current purchase contract expires.
The move came days after Congress passed legislation requiring the president to suspend the shipment into the reserve in hopes of lowering gasoline prices.
The Energy Department said it will not sign contracts for new shipments of 76,000 barrels of oil a day for the six-month period beginning July 1. President Bush had opposed halting the shipments, arguing that such a relatively small amount of oil would not influence prices. Current shipments will continue. The reserve is 97 percent full, holding 701 million barrels of crude.
The dems come thru again.. uh, well, sort of,, f’n idjits
This will drive the price up. There aren’t very many economists over in Congress, are there?
As an ex SPR employee, I can’t tell you how absolutely absurb this is.
The purpose of the SPR is to keep our military going in case of a disruption of oil supplies. The effect of cutting off the oil supply to the SPR to the overall oil supply is nil.
CS
It kind of makes sense since we are paying the highest price known to this country for the reserve. When (if) the price goes down, then continue filling it up. But this will not do anything but prolong the matter for us all to endure and the dems feel good about it. Traitors all of them.
Idiots.
Complete and total blithering idiots.
Morons.
Scumbags.
I am so completely disgusted with our government, all sides of it, that they offer THIS as some kind of action. If they had done nothing, I don’t think I would view them with such utter and complete disdain.
I am angry that I am paying $3.85 a gallon for gas, but I understand things work that way sometimes. I don’t expect the government to fix it by doing price fixes or going after the oil companies. That doesn’t fix anything, and makes everything worse, as Nixon and the rest of us found out back in the Seventies.
But I DO expect them to work towards fixing it over the long term by passing any legislation that increases supply (or at least works towards that goal) thereby lowering demand and princing as well.
What they did is a form of masturbation, and it makes me angry.
That will do nothing at all.
Less than nothing, in fact.
I trade futures on a pretty regular basis and I can say this:
Want to see the futures contracts drop?
Want to see a 20 dollar+ per barrel price drop instantly?
Announce that we will drill ANWAR.
Another 15?
Announce that we are drilling the coasts - before Cuba and China do - Yes, they can.
More? Announce that we are encouraging Nuclear power on a large basis
Still more? - Build a REFINERY right here. - They are going to be built in China right now, you nitwits!
Me, neither. ;->
"This calls for a stupid and useless gesture on our part"
You must not know what you are talking about. Our political heroes promised us fast relief.
Plop, plop...fizz, fizz.
Bush won't do it. McLame won't do it.
Not an ounce of gumption between them.
Why will it drive prices up?
It is my understanding the Chinese will start construction on 15 refineries this year alone. Not one of them will conform to U.S. Clean Air Act requirements, but of course they don't care. The Algore maniacs never go after China because they have the correct form of government. Meanwhile, we haven't built a single refinery in 30 years.
Yeah, that extra 0.5% will really make a difference...
This is more show than anything else.
But there is some common sense to it.
The Reserve is 97% full. We can wait and fill the other three percent when prices come down. No sense buying oil at $ 127/bbl when we can buy it in a few months for much less.
The military—ie the USAF— is developing synfuels for its airfleet. As this becomes more standard, the existing reserve can go farther. We may never even need the extra 3%.
And it frees up 70,000 bbls/day for the general market. No one thing will bring prices down, but many things, done together, will.
I just cancelled a road trip to Chicago—that saves 1500 miles of driving. Every little bit helps.
But we’re at war. Keep fillin’.
More proof that the government is broken. Everyone knows it. It’s the only reason an unqualified empty suit like Obama is a serious candidate for president. He’s promising change. People are so sick of our incompetent leadership that they’d elect a dead dog just because it promises to be different.
The U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. Established in the aftermath of the 1973-74 oil embargo, the SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy. It also allows the United States to meet part of its International Energy Agency obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve.
The Energy Policy Act of 2005 directed the Secretary of Energy to fill the SPR to its authorized one billion barrel capacity. This required the Department of Energy to complete proceedings to select sites necessary to expand the SPR to one billion barrels.
—
I’ve traipsed a few of the sites in the 80s.. physical security work.
I remember visiting a spot near the Mississippi, St. Johns was the port name, I think. They didn’t have Big Hill online, Bryan Mound was in the works but Bayou Choctaw and West Hackberry were operational. Things have changed a bit in 20 years.
Nit wits.......
You're being rhetorically generous Sub-Driver.
I was just running some cursory numbers and it only shows the lunacy of the democrats and some republicans on this issue.
The US uses 20,698,000 barrels of oil a day. The US consumes 9,253,000 barrels of oil for gasoline a day. Congress just mandated that we stop putting 76,000 barrels a day in the reserves in order to drop gas prices. A typical barrel of oil produces 20 gallons of gasoline. Ok..here is my math (it might be wrong, it’s happened before).
76,000 barrels a day represents 0.004% of our daily use of barrels of oil.
76,000 barrels of oil = 1,520,000 gallons of gas.
Daily consumption of gas (9,253,000 barrels of oil) = 185,060,000 gallons of gas.
76,000 barrels of oil (turned into gas) = .008% of our daily consumption.
With those numbers...the stopping of 76,000 barrels a day into the reserves is like a gnat on an elephants behind. The dent it will make will need to be seen with an electron microscope.
Nit Wits is correct...mathematically speaking.
Just went to $4.02 for premium in Charlotte, NC
Expanding the Nation’s Strategic Petroleum Reserve
http://www.fe.doe.gov/programs/reserves/spr/expansion-eis.html
MORE INFO
Read EPAct sections 301 and 303 on SPR expansion
http://www.fe.doe.gov/programs/reserves/spr/EPACT_Expansion_Sections.pdf
The Energy Policy Act of 2005 (EPAct) directs the Secretary of Energy to fill the Strategic Petroleum Reserve (SPR) to its authorized one billion barrel capacity and to select sites necessary to enable acquisition by the Secretary of the full authorized volume.
The current physical capacity of the SPR is 727 million barrels. Following passage of the EPAct in August 2005, the Department of Energy (DOE) began proceedings to select sites necessary to expand the SPR to one billion barrels. Thus far, DOE has issued the following:
Expansion Plan (2007) to fill the SPR beyond 700 million barrels
http://www.fe.doe.gov/programs/reserves/spr/Expansion_Plan
Environmental Impact Statement (2006) and Record of Decision (2007) for selection of a new site
http://www.fe.doe.gov/programs/reserves/spr/EIS_and_ROD
Supplemental Environmental Impact Statement (2008) to address newly identified issues
http://www.fe.doe.gov/programs/reserves/spr/SEIS
In addition to current law that directs expansion of the SPR to one billion barrels, the President announced in January 2007 that the SPR should be expanded to 1.5 billion barrels in order to increase the Nation’s energy security.
And those calculations assume that the 76000 barrels all go to the US market and is not consumed on the world market.
Like the DFL controlled house and senate in Minnesota raising the tax at the pump by five cents, in real time, to help bring the price down?
We need to see the forest for the tree's to understand the workings of government I guess. /s
I’m sure others have made the point but the RATs won’t drill because any oil we would get by drilling would be a “drop in the bucket” but they’ll increase supply this way by weakening our military. Hypocritical and disgusting.
does that mean by the time i get home in daytona tonite gas will have dropped from 3.95 a gallon to 3.94...??....gawd i can’t wait to fill up...thank you dem’s.....
Daily US consumption: 21,000,000 bbls.
Daily deposit to the reserve: 70,000 bbls
Deposit per cent to daily consumption: 70,000/21,000,000 = .0033
Minutes in a day: 1,440
.0033 x 1440 = 4.79 minutes
Summary: by not depositing to the reserve, additional available consumption equals about:
Nice bandaid.
I’m gonna run with that assumption just for the sake of showing the miniscule amount we are talking about. If the US buys that 76,000 barrels a day and instead of reserving it, keeps it for the gas production.
The percentages would be even more miniscule if the world market numbers were involved...lol.
You should acknowledge that refining capacity has increased through expansions of existing refineries. However, refinery expansions have not kept pace with the demand for gasoline and the demands for gasoline blends. Hence we are importing gasoline as well as crude oil.
A new refinery will be built in South Dakota. It should be complete in 9 to 12 months. However, it will not be operational for about 2 years due to the need to complete a pipeline from Canada to crude from their new oil discovery.
Action without thought is the way for individuals these day's apparently.
Great post henkster!
It’s at $4 for reg in Mi.
That would make sense. How it was actually sold to Congress was as a buffer in case the Arabs cut off shipments again so the civilian market wouldn't be disrupted. Also, it could be used to regulate the price of oil. Sounds absurd and apparently is absurd, but that's what they argued when they started the SPR.
Just went 4.10 for regular in NYC
I always had faith that the Democratic Party once in power would get a solid energy policy in place. It’s about time! Nancy, job well done!
Now excuse me while I go stimulate the economy with my new windfall of 3 cents a month.
Forestalls demand. If they actually decided to top it off and lock it down, then the demand for future crude actually drops. This contributes to the pressure currently mounting on the market to deal with the coming softening of demand for crude. Predictions are, based on current supply levels of crude, and based on a slacking on the consumption side, that crude will fall, and probably suddenly, to sub $100 levels.
By topping off the reserve, it dries up further future demand. By not, it forestalls demand for crude (eventually you have to top it off sometime).
Tax holidays further distort prices. The entire savings from the tax holiday wouldn’t be passed on to consumers. When the tax holiday expires, suppliers would then hike the price back up, not to the previous level, but by the additional missing tax component.
If the government REBATED the tax back to consumers themselves, it would be another story. Actually, that would not be a bad idea to help support the trucking companies. Rebate them at the end of the year for the taxes paid on $4.50/gal diesel. That would be a chunk of cash.
Good points.
Let’s remember the folks, this is just gas price politics in an election year. Nothing to get worked up about.
That is true and remains true to some extent. However, in the case of a signifcant emergency - oil drawn from the reserves would be prioritized to the military and related industries and infrastructure.
Look at the bright side with appreciation for the Polar Bear is protected and guaranteed a fulfilling life on earth via Washington dictate.
Heh, I just planned a 1500 mile trip to Pa, along with another 1500+ trip back though Ken-tuc-ee.
Your concept is meaningless in the entire realm of affairs.
No disrespect intended.
The next sad fact of this is the US doesn't have to buy the oil put in the reserves.
We get the oil free in the form of royalties from drilling on public land.
You can be sure that if we get the $$ instead it wont be at $127 bbl and the RATS will just waste it on worthless pork.
You expect the price of crude to drop? I don't. It's as cheap as it's going to be right now.
Dolts! But it looks like the American Sheeple are going to get what they are screaming for if you believe the polls on issues from the economy to healthcare. Trouble it's going to hurt us that are thinking with our heads instead of our wants.
Indeed it would. Military needs would also be met easily by rationing civilian use since the USA produces eight million barrels a day on its own. Barring Democrat resistance in Congress to restricting civilian use of petroleum products in time of war (yes, they would try that.)
Further weakening our national security. The Dems are trying to destroy us.
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