There’s a poignant irony about the upcoming July 4 holiday: we’re celebrating our country’s political independence at a time when so many Americans are suffering from an acute lack of economic independence. Jobs are scarce and inflated fuel costs are making everything from food to appliances more expensive. And while the same could have been said about the economy last year, or even the year before, we are struck this year by the weak response coming out of Washington: tapping the Strategic Petroleum Reserve.
It’s not that President Obama’s decision to release oil from the Strategic Petroleum Reserve won’t make a difference; it’s that any impact it does have on increasing oil supplies and lowering prices will be slight and temporary and will do absolutely nothing to address the bigger problem of U.S. dependence on foreign oil. This longstanding dependence on foreign oil and neglect of our own natural resources has cost us jobs in oil-related sectors and has left just about every American’s budget subject to the whims of a global market dominated by foreign producers who have their own political agendas.
The problem with viewing the Strategic Petroleum Reserve as a solution to an energy supply crunch is that it’s far too small to offset the volumes of oil we could — and should — be producing in the U.S. Even when it is filled to capacity, the reserve can only hold about 725 million barrels of oil, enough to power the United States for a little more than a month, based on current consumption levels. And the amount of oil that can be released at any given time without compromising the integrity of the Strategic Petroleum Reserve is much smaller: To deal with the current supply crunch, the U.S. is releasing about 30 million barrels.
That’s a volume that we could easily achieve with more active drilling and production. CEA recently published a response to the president’s decision to release oil from the SPR, where we note that granting permits to explore and produce in parts of Alaska that are currently off limits could add 1.37 million barrels of oil per day. Granting permits that would provide for more production in the Gulf of Mexico, along with approving the Keystone XL Pipeline Project, could bring that increased production up to 2.2 million barrels per day. And unlike the oil from the Strategic Petroleum Reserve, which can only provide temporary relief, oil from Alaska and the Gulf of Mexico could make a real difference in supplies — and prices — for far more than 30 days.
David Holt is the president of Consumer Energy Alliance.