The oil companies were allowed to deposit extra oil to the reserves at a later date, to make up for shortages. When the oil companies are forced by the government to fill the SPR with higher priced oil, instead of being able to use federally-owned oil from offshore oil leases, and selling the higher priced oil on the open market, it ends up costing taxpayers more. Over the three months in 2002, filling the SPR with the higher priced oil, ended up costing consumers an additional $100 million dollars.
In December of 2002 Saddam Hussein refused to renew the U.S. oil company contracts and the rest is history, by the end of 2006 Iraq oil exports to the United States had dropped to 553 million bpd. We invaded Iraq in March of 2003 and have yet been able to get crude oil exports from this country up to pre-war levels of 795 million bpd. Anytime there is a pipeline explosion in Iraq, it effects the amount of oil the country is able to export.
Nigeria has been another problem area with unrest and sabotaged pipelines. Anytime there is an oil disruption it will go towards reducing the amount of oil available; thereby increasing the price. Even minor interruptions, such as a fire in a refinery within the U.S. that stops production for a day or two has the ability to affect the price of gasoline, depending upon the location of the refinery.
How much gasoline do we waste every day? In the colder states, it is not unusual to see cars running in the parking lot of the local grocery store with men sitting there waiting, probably for their wives to do the shopping. That happens now, even with gasoline headed for $4.00. When it hits $5.00 a gallon maybe we can figure out a way to cut down.
Following are some suggestions:
1. Let the wife go grocery shopping by herself if she can drive.
2. Let the husband do the shopping - obviously he can drive himself.
3. Get out of the car and go into the store together -- turn the engine off.
4. Make fewer trips.
5. Turn in the Hummer.
This country has known for decades that we either need an alternate energy source, or we need to build more refineries to increase production, yet here we are caught between a rock and a hard place.
United States Department of Energy - 2006 figures
Report dated March 5, 2003 - U.S. Strategic Petroleum Reserve
1 | 2
