Monday, August 04, 2008

Today It's a Crisis

Apparently our year-long struggle with soaring energy prices is an emergency now, because Barack Obama thinks it is: he now says it is time to start tapping the oil in the Strategic Petroleum Reserve. He announced this during a speech today in Lansing, Michigan.

Sen. Obama seems, however belatedly, to have discovered that the high gas prices we've seen this year have been taking a big bite out of the nation's economy. But it does beg a question: why now, on August 4, is it time to act?

Here is what Obama said on July 7 about using the SPR to help with oil prices:

I do not believe that we should use the strategic oil reserves at this point. I have said and, in fact, supported a congressional resolution that said that we should suspend putting more oil into the strategic oil reserve, but the strategic oil reserve, I think, has to be reserved for a genuine emergency. You have a situation, let’s say, where there was a major oil facility in Saudi Arabia that was destroyed as a consequence of terrorist acts, and you suddenly had huge amounts of oil taken out of the world market, we wouldn’t just be seeing $4-a-gallon oil. We could see a situation where entire sectors of the country had no oil to function at all. And that’s what the strategic oil reserve has to be for.

Odd. We haven't had a major oil facility destroyed because of a terrorist act. In fact, the price of oil has declined rather precipitously in the last few weeks. On July 7, when Obama made that statement, oil reached $145 a barrel, on its way to the high price reached on July 12, when oil closed at $147 a barrel. As I write, it is at $120.71 (and it may be less when you click that link).

Meanwhile, the price of gas has gone down, too. On July 7, the day that Barack Obama didn't think it necessary to tap the SPR, gas prices in the Twin Cities averaged $3.92. Today, the number is down to $3.63, although I saw it as low as $3.56 at gas stations near my house today. If $4 a gallon oil is not a crisis, why would $3.56 a gallon oil be a crisis?

Of course Sen. Obama is privy to information that the rest of us aren't. Perhaps we are looking at a real emergency tomorrow? Hard to say. But is the current state of the oil market, with prices falling, an emergency? I suspect we all would agree that it isn't. In fact, there's a pretty good likelihood that prices will continue to fall. So why is Barack Obama so concerned about gas prices now, a month on from when they were at their peak?

Put it this way: it is not likely that Obama's newfound devotion to consumer relief at the pump has a lot to do with the price tracking charts linked above. Rather, it's quite likely that this newfound devotion has a lot more to do with a chart that really matters to Obama.

Cross-posted at True North


Gino said...

well, first off, the SPR is supposed to be for military use. if he dont know that, then he shouldnt be commander in chief.

second: he is all about change, aint he?

Right Hook said...

In his speech the Messiah decreed that "we must end the age of oil in our time".

This clown is clueless in so many areas, but is particularly deficient in economic acumen. He appears to have no idea on how deep the dependence of our world leading economy is on oil as a fuel as well as a raw material in everything from road pavement to life saving medical implements.

The real crisis is that this street rabble-rouser actually has a good chance of becoming our next president in very tumultuous times.

Anonymous said...

I am loving the mock outrage. John McCain isn't exactly the pivture of integrity here. For years he has pushed aggressively to regulate carbon emissions; he has opposed Bush's energy bill; he has opposed efforts to drill in ANWR, and until two weeks ago, he has opposed offshore drilling. But now that gas prices have spiked in the middle of his presidential campaign, he is all about the drilling. Wow, politicians acting like politicians! Imagine that!

BTW Gino, I agree with you that George Bush shouldn't be commander in chief, but I don't know where you get the notion that the SPR is only for military use. It was created during the energy crises of the 1970s to counter disruptions in the flow of oil. It is maintained by the DOE, not the DOD.

Right Hook said...

Rich -

My outrage that a man with Obama's questionable background, demonstrated poor judgment, and extremely thin resume can be a viable candidate for POTUS is very real.

As far as McCain goes, I can't find anything in your statement that I disagree with.

The choice comes down to the politician or the poser. I reluctantly will have to go with the politician.

Mark Heuring said...


I'm not outraged. I'm amused. But I suspect you knew that. I also think you know that I'm not a McCain fan. I support him because the alternative is no alternative at all.

Watch for an e-mail; I'll be in the Chicago area next week and it would be great if we could touch base.


Anonymous said...

I am really looking forward to meeting up. Wanna do a Sox game? I am heading to Boston and Montreal to check out colleges with my son this weekend, but am wide open after Sunday. My wife took the younger kids to Florida to visit her parents, so I am bach'en it next week.

And yes, I know you are amused. I am too. Neither of these guys are showing me much right now. BTW, speaking of being amused, did you catch the Mitt Man's interview on CNN last night? If this doesn't knock him off the VP short list, then I don't know what will.

WOLF BLITZER: Can you cite one legislative accomplishment that Senator McCain produced during those 26 years in Washington in order to achieve energy independence?

GOVERNOR ROMNEY: Well, I'm not a historian that goes through all of the pieces of legislation John McCain has worked on.

Looking forward to hearing from you.