Q&A Friday #15: Should The President Dip Into The Strategic Petroleum Reserve?
Question: “What do you think about the president not dipping into the national reserve to lower gas prices? With gas prices cheaper than they were 20 years ago (inflation corrected), I don’t see the big problem. I also believe that the reserve should be saved for a true emergency, not to lower prices. I do, however, see the current price situation creating jobs and revenue in our oil-producing states, decreasing our reliance on foreign oil and creating demand for higher-mileage vehicles. These higher prices may also create enough demand for auto manufacturers to create alternative-fueled autos. What’s ironic is that the Dems have been trying to accomplish this by artificial means (government demand/regulation), which has failed, versus market demand, which is what it will take for alternative-fueled vehicles to be profitable and successful. Your thoughts?” — Dennis
Answer: As far as dipping into the Strategic Petroleum Reserve goes, I agree that would be a bad idea. The national reserve is supposed to be used for emergencies and from what I’ve read, most experts don’t believe that would make a large impact on prices anyway.
On the other hand, as you say, high oil prices, especially if they stay high, will help fuel demand for alternative-fueled vehicles. Of course, it also slows economic growth, so the sooner we get cheap gas back, the better…