The decision to put a moratorium on drilling in the Gulf by President Obama equals half of the sweet crude inventory in the Strategic Petroleum Reserve. The sweet crude inventory is estimated to be 292 million barrels in the SRP. The loss of production due to the moratorium is estimated to be 375,000 barrels a day in 2011. Or, 136 million barrels of sweet crude for the year. Or, roughly 10 days of demand for the US Gulf Coast refineries. And, one-third of the daily crude from Libya.
This week I watched 3 fools debate the reasons for high gasoline prices in the US. First, President Obama, who blamed the speculators. It takes a lot of gall for a president who is the person most responsible for the high gasoline prices to name speculators as the cause. This time it is hard for him to go after the usual culprits, US oil companies, since they are likely to bring up the moratorium.
Bill O’Reilly, despite his pedigree, can’t get over the fact that his Dad was never more than a low-level accountant for an oil firm, and he has a debate with Lou Dobbs about the Obama claim. Both agree it was the speculators, but O’Reilly gets back to gouging at the pumps. He, as a closet socialist, believes the oil companies owe it to the public to take losses for the country. Dobbs believes the speculators need to put up 50% of the contract to keep them honest.
If there is any one person who has more culpability in the high gas prices in this country, it is Obama.
Nobody gets it. Oil is a global commodity. China is building cars at a record rate. GM, government motors is trying to sell more cars in China. Those cars require gasoline. When we pinch our most reliable and cheapest source of oil, we get hurt. We did it and Obama needs to stand up and take credit for what he did.
