Tapping the Strategic Petroleum Reserve (SPR) is an energy solution for politicians who are not serious about real energy solutions, but H.R 6578 seeks to do just that.
Entitled The Consumer Energy Supply Act – in case you hadn’t noticed, truth in advertising laws don’t apply to the names of energy bills – the bill would tap 70 million barrels of oil from the 700 million SPR in an attempt to flood the market and bring prices down. It would add it back at a later time.
This is bad policy, for two reasons. For one thing, the SPR was created to deal with an emergency that cuts off oil supplies, and not as a means of flooding the market in times of high prices. Oil removed for non-emergency reasons won’t be there should a true emergency arise. And, as a practical matter, the amounts at issue are far too small to make gas noticeably cheaper for an appreciable length of time. Further, any downward pressure on prices now would be followed by equal and opposite upward pressure when the amounts are added back to the SPR. For reasons that are not entirely clear, the bill requires that the oil added back be of a lower quality than the oil taken out, but the fact remains that this is a zero sum charade.
But supporters of this bill have inadvertently highlighted a real solution. If, as proponents claim, the amounts of oil this bill seeks to take from the SPR are sufficient to make a difference in the price at the pump, then the far greater amounts of additional supply from off-limits areas like Alaska’s Arctic National Wildlife Refuge (approximately 10.4 billion barrels, or nearly 150 times the 70 million barrels in this bill), and the 85 percent of America’s territorial waters that are off limits (approximately 19 billion barrels, or 270 times the amount in this bill) should really do the trick. Granted, unlike the SPR this energy won’t be available right away, but if tapping the SPR could make any difference at all now, then increased domestic production could make a much bigger difference in the years ahead.