Another Bad Response to High Gas Prices

Conn Carroll / February 11, 2008

Sen. Byron Dorgan (D-N.D.) has joined six of his Senate colleagues (Jeff Bingaman, Carl Levin, John Kerry, Susan Collins, Joe Lieberman and Ron Wyden) in introducing a bill “to increase the supply and lower the cost of petroleum by temporarily suspending the acquisition of petroleum for the Strategic Petroleum Reserve.”

The SPR is the nation’s emergency oil stockpile, and it currently stands at nearly 700 million barrels, close to capacity. Nonetheless, the Bush administration is still adding to it, at a rate of around 100,000 barrels per day. Dorgan claims that doing so “drives gas prices higher by removing oil from the market.”

That’s arguable, and in fact an Energy Information Administration study found that the impact on prices of filling the SPR is trivial. But what is particularly striking is that every sponsor of this bill is also an opponent of expanding access to domestic oil reserves, which contain far more oil than the amount at issue here. For example, a small portion of Alaska’s Arctic National Wildlife Refuge (ANWR) is believed by the U.S. Geological Survey to contain 10 billion barrels of oil. That’s upwards of 1 million barrels per day, an order of magnitude higher than the amounts going into the SPR. And, keep in mind that ANWR is only one such restricted area in the U.S. Other off-limits areas, both onshore and offshore, offer the potential of even more domestic petroleum. (more…)