Obama administration coy on possibility of tapping oil reserve as gas prices rise

They are not saying too much about releasing some oil from the reserves.

Maybe that's because it may not help enough if at all.

The oil and gasoline prices are set by price on world trading markets for the most part.

Obama did release 30 million barrels last summer however.
(don't know if it helped or if it hurt)


Published February 25, 2012
FoxNews.com

The Obama administration is staying mum about the possibility of opening up the Strategic Petroleum Reserve as a way to curb the rise in gas prices -- declining to rule it in or out while insisting all along that officials are not interested in "short-term fixes."

Treasury Secretary Tim Geithner stirred speculation on Friday when, in an interview on CNBC, he said "there's a case for the use of the reserve in some circumstances."

Geithner said the administration would "continue to look at those and evaluate that carefully."

Release some oil ?


I would think a tax relief on gasoline would offer the most help to the citizens !!


Is there enough oil in the reserve to make a difference ?

reply to post by xuenchen

I think you'll find the government has never had it so good. You know how much tax is on gas? Why change a winning formula or rule anything out in the future that would improve that winning formula?

No idea about the US but the only people that get tax relief on gas here are companies. I forget the colour but the cheaper diesel has a special dye added to it so that Law Enforcement can easily see if a consumer is driving his car on illegally obtained fuel. I think it's pink or purple, not 100% sure though.

Prices did drop last year after he released oil reserves...at least in my area it did. Went down about 20 cents or so I think right after he did it.

Don't know if it will make a difference this time however.

doubles!!! (deleted)

Could be a psychological trick. Keep raising gas prices until we can't take it, then attack Iran, and then bring them down and say, 'see we had to attack them'

reply to post by xuenchen


I think the reserves are huge.
The President is likely to free up reserves and lower oil prices when it is politically expedient.

I'd just like to note that the Strategic National Reserve is there and was created for a specific purpose. That wasn't for a cheaper gallon of gas to get to work each day, but to supply petro products and fuel for the military in a time of war and shortage of oil for the refineries.

Given that we're messing with Syria on the west and Iran on the East of the primary Oil supply region for the whole planet, this would seem to be the worst time imaginable to take a single barrel from that.

It MAY just be needed for it's original purpose after all, however unthinkable that was until recently.

They just need to force like 85% of the gas made here must be sold here. We would see gas prices drop a lot if that would happen. I bet if that pipeline ever gets built it won't do a damn thing to lower US gas prices. All the gas made here should be taxed, it shouldn't matter if it won't be used in the US, make other countries pay the tax just like we have to pay VAT on anything we order from UK/EU.

Originally posted by Echo007
They just need to force like 85% of the gas made here must be sold here. We would see gas prices drop a lot if that would happen. I bet if that pipeline ever gets built it won't do a damn thing to lower US gas prices. All the gas made here should be taxed, it shouldn't matter if it won't be used in the US, make other countries pay the tax just like we have to pay VAT on anything we order from UK/EU.

The Pipe line would actually increase the cost of gas at the pump. The oil pipeline is intended to send oil to the refineries in Houston. Those refineries primarily export fuel to Europe and Latin America.

Originally posted by Wrabbit2000
I'd just like to note that the Strategic National Reserve is there and was created for a specific purpose. That wasn't for a cheaper gallon of gas to get to work each day, but to supply petro products and fuel for the military in a time of war and shortage of oil for the refineries.

Given that we're messing with Syria on the west and Iran on the East of the primary Oil supply region for the whole planet, this would seem to be the worst time imaginable to take a single barrel from that.

It MAY just be needed for it's original purpose after all, however unthinkable that was until recently.

Not really. Only for Europe, China and India. The USA get's it's oil from domestic drilling, Canada, Mexico, Nigeria and Venezuela. The oil we import from that region of the world is really only imported so it can be refined and then exported again.

reply to post by korathin

I don't argue the point of where we get our oil but forgive me for saying this, you're falling into the same trap of limited view that so many do on this.

Yeah... We DO get more of our Oil from Western sources than Arab ones...but if the Arab tap runs dry or has serious disruptions on an ongoing basis, where are those nations who DID depend on the Arabs going for their oil in the mean time? Well. they're coming to whoever IS still selling it...which are the same people WE buy from.

So........... We don't have to buy a drop from Iran to be crippled by their disruption on a global basis. The same goes for that whole region. As long as any nations buy A LOT from them, then a drop in supply screws everyone.

What would be the point in releasing our strategic oil reserves? Currently, we have an surplus of gasoline in the US and petroleum companies are shipping refined gasoline overseas, due to a lack of demand in the US. So, if we release the oil reserves, then we will just have more gasoline getting exported and more profit for the money grubbing petroleum companies.

I suggest that we hold on to our oil reserves for when we really need them; like if we get cut off from our major suppliers (Canada & Mexico). Otherwise, it's a pointless.

Originally posted by THE_PROFESSIONAL
Could be a psychological trick. Keep raising gas prices until we can't take it, then attack Iran, and then bring them down and say, 'see we had to attack them'

Yup, you hit it right on the head.
2nd line.

Originally posted by newcovenant
reply to post by xuenchen

 

I think the reserves are huge.
The President is likely to free up reserves and lower oil prices when it is politically expedient.

The reserves are 727 million barrels with a release capacity of about 4.4 million barrels a day.

165 days of reserves.

But since the US imports 12 million barrels a day... yeah a whole lot of people wouldn't have gas.

How to stop raising gas prices : order Bernanke to stop the printing of money and stop the warmongering.

reply to post by Vitchilo

Your numbers go to support the insanity of opening the reserve for anything but addressing physical shortage in time of war. It won't do squat to help the whole nation, but it would keep the United States Navy in fuel for everything outside the Nuclear ships for the better part of a major world war. As intended. Same for the Air and Armor which all use fuel.

Reserves are for reserving. lol.... Bush used this for political points and it was wrong. If Obama does it, it's no less wrong. It just wasn't made as a Politicians band aid solution to a lack of leadership.

Events over the last few days in the Middle East confirm that for all its self-congratulatory rhetoric the Obama administration has no effective policy for that region of the world www.newgulfnews.com...

Obama's To Do List:

November 1, 2012 Open the valves on the Oil Reserves
November 2, 2012 Rehearse Acceptance Speech
November 5, 2012 Guitar Lesson with Keith Richards
November 6, 2012 Bring 'Back Mick Jagger to Jam in my White House party/karaoke room. (MC Hammer to open)

NO NO NO. What is wrong with this guy? The Strategic reserves are for EMERGENCIES. They are NOT to be used just to lower gas prices to make the POTUS look better. I know it's been done in the past ... they were wrong too. It should NOT be touched. NO NO NO

Originally posted by xuenchen
...

Obama did release 30 million barrels last summer however.
(don't know if it helped or if it hurt)

...

Is there enough oil in the reserve to make a difference ?

One barrel of crude produces around 40 gallons of gasoline. 30 million barrels would make around 1,200,000,000- 1.2 billion gallons.

There are 4 million cars on the road in and around Los Angeles so if that fuel was divided evenly among the cars... 1200000000 / 4000000 = 300 gallons available for each car... and if each car used 10 gallons per day... 300 / 10 = 30 days' worth of gasoline for Los Angeles.

There are approximately 125 million cars on the road in the US. So... 1200000000 / 125000000 =
9.6 gallons for each car. If each car needed 10 gallons per day... the release almost delayed imports by one day.

I'll admit the figures are skewed because we don't know IF each car requires 10 gallons per day. Assuming such would suggest each car drives 200 miles a day and gets 20 miles per gallon. We know most get around 20, some get more, and some get less. It is reasonable to assume that most don't drive 200 miles a day- as that implies living 100 miles from work. It also doesn't take in to account people who use public transit, nor does the figure take into account public transit fuel requirements either.

So for error's sake, let's halve the fuel usage. So now we have enough to last L.A. for 2 months, or the whole country for 2 days.

I think the effect is more psychological than real. Gasoline vendors will sell the fuel for as much as they think they can get from you. Releasing such a comparatively miniscule amount of fuel puts the peoples' minds at ease for a time too. In the end, the oil companies reap the benefit of having oil "here", which means they don't have to pay to transport it- the government already bought it. So they get to refine it and sell it to you for the same price as the other stuff, thus increasing their profit margins, and when the release runs out, prices go up so they can maintain their profit margin.

You might have a little fun looking at historical gas prices during Bush's last few years and comparing those to prices during Obama's tenure. You'll see a sharp spike in gas prices during the last year of Bush, but nothing so drastic as of yet under Obama. To my eye, it seems the oil companies wanted the Republicans out so prices spiked, then dove when Obama was elected. Yes, they've risen again, but not so drastically.
GasBuddy
That shows that, somehow, the oil companies kept gas prices lower in relation to crude prices under Bush than they have under Obama... ... until Bush's last year in office, when it was pretty clear that Republicans were going to lose... or maybe the gas prices' rise made them lose.
Who knows?


So, obviously, Obama's not going to show his hand in the game he's playing. He will have to capitulate to oil companies because if gas prices skyrocket like they did under Bush, Obama will be hard pressed to do better than a snowball in hades if he wants re-elected.

reply to post by abecedarian


Good comparison.

However, a barrel of oil only yields around 19 gallons of gasoline on average.

we need to recalculate.

a barrel of oil


gasoline
19.5

distillate fuel oil
(Includes both home heating oil and diesel fuel)
9.2

kerosene-type jet fuel
4.1