Obama laying the groundwork to tap the Strategic Petroleum Reserve
Here we go again: Obama playing politics with our future.
Austan Goolsbee was Barack Obama's senior economic adviser during his 2008 campaign and went on to serve as chairman of President Obama's Council of Economic Advisers. He left in mid-2011 to teach at the University of Chicago.
Now he takes to the pages of the Wall Street Journal to advocate releasing oil from the Strategic Petroleum Reserve because, he says, there is too much crude stored away for emergencies.
The most absurd part of his column is when he dismisses concern that we may need this oil if, say, a war breaks out in the Middle East:
In recent years, new technology has unlocked large amounts of low-cost production in places like the Bakken Shale of North Dakota and the Permian basin in West Texas. There has also been a tremendous increase in crude production from the tar sands of Canada. All of this new output has reduced our demand for oil that we get from strategically uncertain suppliers.
The problem with the oil from the Bakken Shale is there is a dire need to figure out ways to get this oil from the remote regions of North Dakota to the rest of America. Pipelines need to be built so that producers do not have to rely on railroad cars and barges to move the oil - those are not sufficient to get the oil out right now without adding substantial costs. Secondly, did he actually mention access to the tar sands of Canada? Is he so ensconced in the ivory tower he does not realize Barack Obama has killed the XL pipeline and thereby the oil from the tar sands is not available to us?
Clearly, Obama is laying the groundwork to justify the release of oil from the Strategic Petroleum Reserves should the continued rise in oil prices hurt his campaign even more than it already has in the last few months. It is his "ace in the hole".
The SPR is designed to help Americans in case our supply of oil is interrupted by war or natural disaster - not help Obama's re-election prospects.
Goolsbee tries to justify release of the oil by noting its sale will bring in billions of dollars to the Treasury. The hypocrisy is palpable and offensive. This is a man who helped oversee unprecedented deficit spending by Barack Obama who now suddenly sees the need to replenish government's coffers by the relative drop in the bucket that the sale of oil would bring.
The price at the gasoline pump is on the rise again, and liberal Washington's first reaction is predictably stale and political: tap into the Strategic Petroleum Reserve. This is clearly driven by election-year politics, leading us down a path fraught with dangers.
Worse than just empty campaign politics, this decision would actually increase our vulnerabilities because we'd have less buffer and protection should a true crisis hit. And we will have to backfill the reserve (no doubt after the election), ensuring no lasting impact on price.
The reserve was created for true emergencies, particularly related to national security and natural disasters. While many would argue that the Obama energy policy has been akin to such a disaster, that self-inflicted wound isn't what the reserve is for.
Last year, the president released 30 million barrels of the reserve to manipulate price and has yet to refill it. Releasing even more this year, again for political price-fixing purposes, only lessens our buffer and protection when a true crisis hits.
And that scenario isn't hard to imagine given the situation in Iran and the Middle East. Many would say that such a crisis is more likely now than at any other time in decades.
In addition, backfilling the reserve doesn't come without a price. We're already short more than $500 million of the funds we need to backfill the reserve. Plus, buying oil to backfill it will drive the price at the pump back up, probably ensuring that the reserve will just be left depleted until after the election.
And, if we sell the oil for less than it costs to refill it, taxpayers end up net losers. But at least for a short time gas prices at the pump will decline - only to shoot up later (say past November). Furthermore, releasing the oil from the SPR will make us vulnerable to future pressure from the Iranians who will realize America will be more at risk given lack of a reserve.
Clearly, Goolsbee is running interference for Barack Obama. He is laying the groundwork for Obama to justify tapping the SPR. He and Obama are playing politics with our future.
This is evidence that Obama and his fans will stop at nothing to use the power in their possession to win re-election, despite what harm may befall Americans.