Correct me if I’m wrong, but didn’t we start The Strategic Oil Reserve when we were at the mercy of OPEC?
In case nobody noticed, we will be swimming in Domestic Oil for another 400 Years.
The days of needing the SOR are long past. Now it sounds like just another Government Boondoggle.
Did we have a Strategic Whale Oil Reserve a couple of hundred years ago?
The SPR is there for unforeseen emergencies in production anywhere - including domestically. It was originally paid for long ago - then under Clinton the pubbies voted to start selling it off when the price was low. The price of oil rose and we started restocking. Now that prices are low again we are selling. Buy high - sell low. That is how our GoPeeers do it.
I'm a petroleum geologist who has been working in the industry for nearly 4 decades. I have worked for oil companies from small outfits to majors (Think four of the former 7 sisters.)
I must have missed something.
The only way we will be swimming in domestic oil is if the administration decides to start boiling us in it.
Yep, we've done one hell of a job bringing production up and prices down, but there is a limit to how low prices can go before drilling stops.
From there, the overall production will decline. Simple reservoir mechanics.
If we don't replace the depletion drop in existing production with new production, we don't even keep pace. If there is an increase in demand, production has to cover that, too, and the only way to do that is with new wells, new producing formations, and new reservoirs, and to some extent, new technology. That is how we got this far.
It isn't like hitting a switch, all that research, data gathering, training the personnel, building the infrastructure, producing the tools, and getting the paperwork done (leases, permits, etc.) to drill those wells takes time and one hell of an investment.
No, we aren't exactly swimming in domestic oil now (we still import a lot, only the Saudis producing as much as they can is causing the glut), and production will decline even more over the long run if our government crashes the price by dumping oil on an already down market.
It is like letting someone manage your portfolio who buys stock at 100/share and sells at 30.
Selling more shares doesn't make the deal more attractive, and losing billions now and likely spending billions more above the current sale price in the future to replace it is just stupid.
There are other ways to raise money, including land sales, opening mineral exploration and mining on Federal Land (the Government gets a cut of the production, just as it does with oil), downsizing the Government, eliminating agencies, redundancy, and waste, and herding the cats on Capitol Hill back inside the fence the Constitution was supposed to keep them in would all go a long way toward balancing the budget.
That isn't so much to ask. Most of us have to balance our budgets and live within our means, it's high time our Government did.
We import far more oil now than we did when we started the SPR.
Domestic oil production has already started falling again with the lower oil prices.