Obama Has a Plan To Manage Our Oil Reserve
The Wall Street Journal | September 08, 2008
By JOHN D. SHAGES
Energy is playing a pivotal role in this year's presidential election. And a crucial aspect of America's energy security not widely discussed is how to best use America's Strategic Petroleum Reserve (SPR). Sen. Barack Obama is proposing a simple maneuver -- called an exchange, or swap -- that will help lower the price of oil for consumers, increase the amount of oil in the SPR, increase energy security, and leave taxpayers better off by about $1 billion. His proposal deserves to be adopted. In 1975, after the Arab oil embargo, the U.S. created the SPR to protect against oil supply disruptions. That reserve now consists of 706 million barrels of crude oil, the largest stockpile in the world. As the steward of that stockpile, the Department of Energy plays an important role in oil markets. Merely announcing oil acquisitions or sales from the SPR moves oil prices. The SPR's drawdown capability of 4.4 million barrels of oil per day surpasses the daily production capacity of Iran, Iraq or Venezuela.
