Monday, June 27, 2011
Political Petroleum Reserve
John Hinderaker:
The Democrats have been blocking oil companies from developing America's fossil fuel resources--the largest in the world--for decades. Whenever their anti-drilling policies are challenged, they assure us that increasing domestic production would do little or nothing to bring down the cost of energy.
Yet, whenever the price of gasoline becomes politically embarrassing, what do they do? They take "emergency" action to increase the supply of petroleum by opening up the Strategic Petroleum Reserve--some 700 million barrels of oil that are stored along the Gulf coast. Today the Obama administration announced that it will release 30 million gallons from the reserve in an effort to hold down prices.
No one pretends that this is the intended use of the strategic reserve--the administration is just trying to get past the Fourth of July without too much political fallout from gas prices--nor does anyone think that a one-time influx of oil will have any long-term impact on energy costs. Still, the administration's action is revealing: if you want to keep prices down, what do you do? You increase supply.
That being the case, why has the Democratic Party done everything in its power for more than 30 years to suppress domestic production of oil? Let's consider some sources of petroleum that the Democrats have blocked. ANWR is estimated to have the capacity to produce 1,000,000 barrels per day. Currently, around 1.5 million barrels per day are produced in the Gulf of Mexico; if the Obama administration would stop blocking permits and allow that production to increase by only 20 percent, that would be 300,000 barrels per day. Then there is the Keystone pipeline. The administration would like to block its construction, which would prevent 900,000 barrels per day from entering the U.S. If it is a good idea to restrain prices by a one-time release of 30 million barrels, why isn't it a really great idea to open up production that would add more than twice that amount every month, indefinitely?
There is, of course, no good answer to this question. The problem isn't that the Democrats are too dumb to understand that opening up our energy resources would lower energy costs and make the country more prosperous. Rather, the problem is that increasing the country's prosperity is not their objective.
