A halt to adding to reserves won’t do that much
With record oil prices standing alongside mortgage market woes and general fears of a recession, it’s no surprise that, going into the busy summer travel season, the price at the pump is on the mind of nearly every American . It’s also on the mind of America’s elected officials, who are tending to an electorate that is increasingly demanding action to bring the price of oil down.
On Tuesday, the House of Representatives and Senate voted decisively to cease depositing oil in the nation’s strategic petroleum reserve (SPR) in an attempt to do just that. The measure was passed by a landslide 385 to 25 vote margin in the House, while the Senate passed it 97 to 1. (Both Hillary Clinton and Barack Obama supported the measure, while John McCain didn’t vote.)
No elected official wants to be on the side of anything that could potentially lower gas prices, but how effective will the measure be?
Not at all, apparently. That’s according to Megan Barnett, a spokeswoman at the Department of Energy, who said that the “very modest rate” that oil is deposited in the reserve “has no appreciable impact on gas and oil prices.”
Her math makes sense. About 70,000 barrels are deposited into the SPR a day, which represents a miniscule 0.4% of the roughly 20 million barrels used each day by the U.S. (As of yesterday, the SPR was housing 702.7 million barrels, equal to 97% of its roughly 727 million barrel maximum capacity. With a full tank, it can serve the nation’s oil needs for about 36 days.)
Giving 70,000 extra barrels a day to a country that uses 20 million will provide some relief, but given the size of consumption compared with the size of the relief, it could end up being equivalent to loosening your belt one notch after eating 100 Thanksgiving dinners.
Nonetheless, House Speaker Nancy Pelosi speculated that the move could ease gas prices by 5 cents to 24 cents a gallon. Others disagreed. Joe Barton, the top Republican on the House’s Energy and Commerce Committee said that “if all the members of the House would go out onto the steps and clap our hands three times and say, ‘Down prices, down prices,’ that would have as much impact as passing this bill.”
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