Tuesday, November 8, 2011
If US SPR of 700million barrels at avg purchase cost of 40$/BBL can be sold at 75$/BBL,why not sell some now?
SPR, Strategic Petroleum Reserve, was set up in 1974 and funded by federal government as an insurance policy for major supply interruptions like the Arab Oil Embargo of 1974. The oil was imported cargo by cargo & placed in storage in salt caverns & salt domes in Texas near many major refineries for a rainy day. The US Dept of Energy (DOE) under Sam Bodman operates it. Portions of the oil in storage could easily be drawn down now & sold into the oil market forcing the world prices of oil to drop to more reasonable prices, lowering the ridiculous geopolitical speculator-driven prices of gasoline & electricity we are paying. The generated revenues from the SPR oil could pay off some of the costs of having the US military in IRAQ & help New Orleans & the rest of the US Gulf Coast rebuild after being devastated by the Katrina& Rita Hurricanes in August 2005. Any SPR oil we draw down now, can be replaced later at lower costs when demand drops due to increased efficiencies & conservation.
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