Oil Reserve Release Short Term Solution


http://www.msnbc.msn.com/id/43510170/ns/business-going_green/t/surprise-oil-release-targets-speculators/

Gas prices are ridiculous.  There is plenty of blame to go around for that.  President Obama is trying his best to deflect the blame from his unbending moratorium on drilling and his unwillingness to explore for our own sources of energy to the greed of the private sector.  So, it should come as a surprise to no one that he is now using a national defense oil reserve to manipulate world oil prices. 

In a purely political move, the president is trying to force speculators out of the oil business by introducing more supply into the market. 

I’m curious, though.  If the speculators are the problem, why would a miniscule amount of oil introduced onto the market affect prices?  The sixty million barrels to be released from US and other countries’ reserves equals less than one day’s worth of demand.  The MSN article above blames speculators for an additional $20 a barrel of trading price.  Why would speculators freak out over such a small amount of oil?  Certainly they are smart enough to know that this is a temporary soulution.  The strategic reserve is limited and cannot be used forever.  Speculators will know that this can’t last. 

Now, how do we know this is a temporary solution?  The idea of a limited reserve is proof enough, but candidate Obama said so in 2008.  In a speech in Lansing, he approved the sale of US strategic oil reserve to reduce gas prices, and called it a temporary solution to a long term problem.  Of course he disapproved of the idea when President Bush wanted to do it. 

Obama’s dedication to green techology is admirable, if misplaced.  This is a guy who doesn’t understand the limitations of technology.  Our best scientists will find alternative energy sources that don’t require us to live in huts and bicycle to work.  But it will take time.  Every advancement a piece of a puzzle.  When all the pieces come together, we will be able to power our homes using the sun, drive a safe car that gets 75 miles to a gallon of helium, and have our factories leave no “carbon footprint.”  Until that time comes, we will use petroleum.  It gives us the most bang for our energy buck.  Sure, you can power a car on batteries.  For about forty miles.  Then what?  Telework from the side of the road? 

Until the United States can secure its own supply of oil, no amount of trickery by the Obama administration will set us free from foreign oil producers.  Once the oil reserve release is over, gas prices will go back up. 

Maybe by that time, we’ll have a president who actually beleives in free market solutions to problems like this one.  Our current president doesn’t. And he never will.

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