19 May 2004 | Jon Gales said...

Also the fact that it wouldn't lower gas prices is a pretty good reason. The reserve just isn't large enough to make a sustainable difference.

19 May 2004 | ek said...

I'm with JF on this one, but I don't agree with your argument Jon. Back in 1991 when the SPR was tapped by, coincidentally enough, George H.W. Bush, it had an enormous impact on the market price of oil and the price of petrol at the pump, this even though it coincided with our first invasion of Iraq.

You have to remember that the price of oil is not a simple matter of supply and demand — it's effected by an assortment of factors from geopolitics to simple emotion. A gesture or announcement by any of the key players involved can have a huge impact on prices very quickly.

A distinction worth making, though, is that we aren't just not tapping into the SPR, we're continuing to add to it, which perhaps isn't the best idea at the moment.

19 May 2004 | ek said...

Hey, forgot to include this, for anyone unfamiliar with the Strategic Petroleum Reserve, the Wikipedia has a nice, brief overview.

19 May 2004 | Anil said...

Given that so much of your work is about communicating clearly, does it bother you that Bush wouldn't use the real reason when announcing his rationale?

20 May 2004 | vaughn said...

Personally, I think Bush's decision was pretty wise. I could understand if gas prices were $5 and he said no, but for $2.44 a gallon, its not worth pulling out all the stops.

20 May 2004 | Tim said...

Jason your posts about Bush are driving me away from this site. You're always searching for a reason to praise this moron.

20 May 2004 | Sunny said...

Its not about praising Bush. Its about praising a policy. If that is not clear to you Tim, you are the moron.

20 May 2004 | a said...

We still have the cheapest gas in the world, even with the current problems. Also, I think that in relative terms adjusted for inflation, gas prices were higher during the crisis in the 1970s and then again at one point in the 80s. Currently we're just seeing the highest prices in absolute dollars.

20 May 2004 | JF said...

Given that so much of your work is about communicating clearly, does it bother you that Bush wouldn't use the real reason when announcing his rationale?

Yes, it does. But I still agree with the decision.

20 May 2004 | Sunny said...

We still have the cheapest gas in the world, even with current problems.

You are very right. I guess most Americans don't realize that they buy gas in gallons unlike the rest of world who buy liters. Factor in the reality that there is about four liters in a gallon, American gas is the cheapest in the world.

20 May 2004 | Kevin said...

I also agree with not using the reserves.

1. Isnt the increase in the price because of higher demand?

2. Isnt the increase in the price because of STRICT environmental laws restricting the construction of new refineries?

Likely both 1 and 2 are both correct.

We have to remember that the reserves are not gas; they are crude oil. With the fact that most refineries here in America are running at nearly maximum production, how could using the reserves help todays prices?

Liberal environmental polices, preventing the construction of new refineries, along with ever increasing demand are the culprits for this latest increase. Two solutions: Ease demand (fuel cells, alternative fuels, etc.) and/or build more refineries.

The optimist in me believes that this years high prices, and next years higher prices, and the year after that will be the first steps that lead American entrepreneurs and scientists to the development of truly viable alternative fuels. When, not if, this happens, the resulting American economy will make the economy of the mid to late 90s pale in comparison.

20 May 2004 | Kevin said...

A few more interesting items:

1. May 12th, 1976 - The date the new last refinery was built in the United States.

2. In 1976 the population was 217,000,000; today's population estimate is 293,000,000.

Interesting isn't it, some 76,000,000 more people today, no doubt many driving cars, riding on airplanes, taking busses.

20 May 2004 | Don Schenck said...

Adjusted for inflation, gasoline in 1981 would be $2.80 a gallon now.

We survived then, we'll survive now. Just that some of you will have to ditch your Escalades ("Excessalade") for a diesel Jetta.

:-)

20 May 2004 | Paul said...

2. Isnt the increase in the price because of STRICT environmental laws restricting the construction of new refineries?

Frankly, I believe that's just a political move to make people angry at "those environmentos" for jacking up the price of gas. Even though there's no pollution anywhere, water is potable everywhere, etc.

Even though he claims it isn't a political move, Bush's choice is. It's either political, ignorant, or bullheaded.

JF: but I agree that higher gas prices are not an emergency. Do we need a reason beyond that?

I agree that higher prices in and of themselves aren't an emergency. But what happens if they get to the point where they affect other services: transportation of goods, for example? That means everything will get more expensive and, well, some people are finding jobs... albeit low-wage ones that aren't anything to get excited over. That means people will be able to afford less food, for one thing.

That's when it becomes an emergency.

I think the other concerning factor is that this price increase has felt more like a 45-degree angle for some time, and there's nothing *apparent* out there that will stop it. If Bush chose to open up the reserves, and if prices fell (as poster #2 suggests,) that would've been a wonderful move for him politically.

21 May 2004 | spk said...

what happened to all that iraqi oil we "liberated" ?? and just who is actually making the money off this sudden jump in oil prices?

if you are going to praise bush for his thoughtful leadership on this matter, it would be nice if you could follow it up with some background on where the increase in prices are coming from? and who is benefitting.

21 May 2004 | Brad Hurley said...

Gasoline in Montreal is running close to US $3.00 a gallon, and it doesn't look like it's stopping anyone from buying SUVs. Although I do see quite a few Echo Hatchbacks these days ;-)

24 May 2004 | Don Schenck said...

I'd just as well have a dollar a gallon tax and put the money toward alternative fuels, conservation and more "green" policies. Once again, I point you to Rocky Mountain Institute and the genius of Amory Lovins (who I have been reading about since the last 70's).

26 May 2004 | John Mac said...

just to add my $2.44 to the mix...

i understand the debate that comes along with increased oil prices in the states (i'm from australia), and that your economy hinges greatly on the price that you buy your oil at... indeed even the social climate changes when prices seemingly go "through the roof".

everyone (meaning conservatives and liberals, politicians and analysts etc) has agreed, whether formally or not, that the motives behind going into iraq, were oil-based. but there is much more to the story. the bush administration, from what i can tell - and especially from reading the motives that his cabinet have (check out Project For The New American Century and read the list of associates), are looking very much long-term. they are not at all worried about oil prices over the next few years, nor are they particularly fussed about winning the next election. what they are worried about is a continuous, cheap supply of oil over the next century. the bush government is basically securing oil so that all industries (plastics, car manufacturing, defense force etc etc) whose livelihood depends on cheap supply are not overly affected... long term... and these are all industries that are being represented by the members of his administration (dick cheney is my case in point).

the problem is that bush has managed to fool a good part of the western world into thinking that going into iraq was a great idea for everyone. on the contrary, our prices have skyrocketed also, but we are paying something around $2.80 per gallon right now (more or less depending on our exchange rate... usually more ;-) ). not only that, all of a sudden, we are among the top 4 on the al Qaeda hit-list, we suddenly are at odds with our neighbours in southeast Asia, and our name is synonymous with the Bush/Blair anti-Terrorism fiasco that has led to a much greater threat of massive terrorist action around the globe. australia has never before been in such a paranoid state as it is now.

my jumbled argument here is that regardless of bush's decision (if it was even his to make), it is not within the slightest interest of the public. the neo-conservative ultra-business-oriented factions within your government are intent on keeping you buying, more and more and more, into eternity. the cheney report basically forcast the number of barrels of oil consumed per day to double within the next 30 years. this is completely against any so-called "environmental" initiatives they may or may not have committed to, and an underlying reason why they backed out of the Kyoto protocol. they are worried that the few people who have benefitted most since the economy explosion post-WW2 will be adversely affected by a global Green movement, and are doing everything they possibly can, including invading foreign countries, to ensure their right to earn ridiculous sums without being held accountable.

(by the way - demand is not what is affecting the oil barrel prices. it is supply that is affecting it. you guys buy your oil, with reason, from all over the globe. primarily you buy from Canada and Venezuela, i think, and also Saudi, Colombia, Indonesia, and West Africa... if these guys decide to hike up the price, your prices jump... so by effectively taking control of another country's supply... especially one that is sitting on 10% of estimated global oil reserves, you've backed a long-term investment into the future of your production industries. surely you understand that it must take a while (i.e. longer than 18 months) to invade a country, demolish any form of government, instate a friendly - and more importantly economically committed - government, distribute oil "contracts" to the businesses that supported your election campaign, and get that oil flowing back home)

....all in all, there is a certain futility about discussing oil prices, particularly in the current political climate, as discussion, debate... even action, will not change what has occurred over the last 18 months. the wheels are in motion for a very much American new-world-order over the next century. and by American, i mean business.

[and before you say i'm anti-American... make sure you do check out that link above ;-) ]

26 May 2004 | JW said...

#1.......i think we went to Iraq because Sadam refused repeatedly to let weapons inspectors into his country, an agreement made by all nations ............and continued his refusal for many many months. Didn't have a thing to do with oil.

There are many ways to secure the future of America's need for oil, without going to war with a country, and Iraq is way down the list as a supplier of oil to the US (Saudi-Arabia being the largest).

Perhaps, ultimately....we may benefit from an alliance with Iraq if one is "ever" reached....but i see it a bit differently. It was not our original purpose for going to Iraq, that purpose was to unseat a horrible dictator and potentially very dangerous man..........if down the road, we do gain an ally in Iraq then we have done the job we set out to do... and the benefits gained from that "if" there are any, will be helping to secure the future of America, a cause i'm sure any soldier that gave his life in this war.......would be proud to have died for.

26 May 2004 | JW said...

#2 If gas prices are up all over the world (which they seem to be), how does this benefit the US only, and specifically Cheney, since the profits do not all go into those particular pockets, but many many pockets........so perhaps the new world order would be a Saudi one instead? Just food for thought.

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