Potemkin Policymaking

by Pejman Yousefzadeh on June 24, 2011

This piece effectively sees through the Obama Administration’s cynical decision to tap the Strategic Petroleum Reserve in response to high oil prices:

. . . Mr Obama’s move serves mainly to illustrate his impotence with regard to the oil price. The entire SPR contains only 727m barrels—38 days’ supply for America, or nine for the world. Even the relatively tiny amount Mr Obama proposes to unload from it has caused protests from OPEC leaders, who say he is undermining their investment in new capacity. There is talk of OPEC withholding supply to make up for America’s largesse.

Moreover, the opaque process whereby crude prices feed into those for petrol also works against Mr Obama. Let’s hope the SPR contains grades that nearby refineries have the capability and spare capacity to process, or the impact of the president’s gesture will be further diminished. A hurricane that knocks out a few critical pipelines or refineries for a spell could easily undo all the president’s good work.

If Mr Obama really wanted to make petrol cheaper, he could ask Congress to repeal or reduce America’s fuel tax. But it’s already low enough that the results would soon be lost amid the fluctuations of the oil price. Anyway, that’s not what he really wants: he wants to look like he’s doing something. And by that measure, opening the sluice gates at the SPR works well enough.

An effective press corps would have called out the White House on this issue long ago, armed with these facts. Heck, even a moderately competent press corps would have called out the White House on this issue long ago, armed with these facts.

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