Yet Another Reason Your Paying More at the Pump
May 17th, 2008
Most people have probably never heard of the Strategic Petroleum Reserves (SPR) maintained by the US department of energy currently housing more then 727 million barrels of crude oil. The reserves were originally created to mitigate future petroleum supply disruptions during the 73-74 oil embargo. With the oil embargo long past the reserves now seem rather foolish. To put things into perspective the 727 million barrels housed in the reserve would account for a 58 day supply of oil to the entire nation (we use about 12 million barrels per day). If the oil was allowed to enter the market the price at the pump would drop by about 30 cents per gallons.
Considering the ever increasing price of gasoline, releasing this crude oil into the market to be refined would come as a relief to consumers. The flip side of course is currently the US is capable of refining only about 2 million barrels per day total, far from the current 12 million barrels we devour each day. Since we have not built any new refineries for the past 25 years within US boundaries refining the oil would be a major obstacle to overcome.
May 18th, 2008 at 12:30 am
Your title is “The real reasons gas prices are high” but you don’t even state why. Second of all releasing that oil would be pointless because it just has to be refilled anyway. It is there for emergencies only and it should be kept as such.
The reason why the gas prices are so high is because not enough oil is being pumped. Because of the lack of the supply people are forced to bid higher. (supply and demand)
May 19th, 2008 at 12:08 am
I agree bad title. But what your forgetting is releasing that oil would not be pointless b/c it does not have to be refilled. Currently 7 million barrels per day are sent to the SPR. Thats over half of what we use. Surely if that oil was allowed to enter the market it would have a significant impact on gas prices.