ENERGY SECRETARY Steven Chu announced Thursday that the federal government will release 30 million barrels of oil from the Strategic Petroleum Reserve , a complex of salt caves that contain 727 million barrels in case of national emergency.
What’s the emergency, you ask? The White House says that military operations in Libya have disrupted supply. But Libya’s oil has been shut in for months now, and oil prices are down from their highs this year. So on Thursday Obama administration spokesman Jay Carney argued that oil demand is likely to rise over the summer. In other words: It’s vacation season, and the White House is worried about high prices through the summer driving months.
Therein, perhaps, is a political emergency, at least in the White House view: President Obama’s reelection prospects will be harmed if national discontent over high gasoline prices continues. The oil release could be seen as a way for the president to take credit for gas prices that are falling anyway, or as an indirect, pre-election stimulus.
Whatever the rationale, it is a bad idea.
The government should not tap the reserve absent a genuine crisis. America consumes much more oil than it produces, and by using the petroleum reserve, it can’t expect to do anything but nudge oil prices, and only for a short time. There’s no question that high gasoline prices cause hardship for many Americans. But the answer cannot be for the government to try to encourage consumption.
Neither tapping the petroleum reserve nor increasing Saudi Arabia’s production will change the basic equation on oil: It is a scarce resource that the developing world will demand more and more of. Americans have enjoyed cheap gas for decades — underpriced when you consider the many social costs, such as air pollution, climate change and the enrichment of hostile foreign regimes, that the country’s dependence exacts. Ideally, as we’ve said many times, the government would tax gasoline more and rebate some of the revenue in a progressive way. And leaders concerned about the political effects of high oil prices would explain the painful realities of America’s structural dependence on crude, not abet Americans in believing that the government can keep prices smooth and low.