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Once upon a time, long,\u00a0 long ago in a country almost forgotten, wise leaders in that oil-using place decided that having some emergency supplies of usable oil was a good idea. Gee, what a good idea! Then, the new leader of that then-oil-independent country decided to turn them oil-import-dependent, so he killed permitting for a new massive project to get more oil from friendly sources, and begged quasi-hostile enemies to produce the oil the country needed to destroy that oil independence. Then he implemented bad fiscal and monetary policies to increase inflation to levels not seen in almost five decades – what could be better? Selling off oil reserves to try and drive some of the inflation he created down? Yes, he did – he pulled 220,000,000 barrels of oil from that reserve and sold it, what a wise and wonderful leader he was.<\/p>\n
And that 180 million barrels may never be returned to the SPR. (Actual sales were 220 million barrels – Ed.)<\/p>\n
\u201cDOE will only select bids that meet the required crude specifications and that are at a price that is a good deal for taxpayers,\u201d the Department of Energy said,<\/p>\n
When the administration was releasing crude from the SPR, there wasn\u2019t any mention of specifications. The only important thing was the volume. At the time, critics noted that the SPR contains mostly light, sweet crude…<\/p><\/blockquote>\n
DoE said they would only buy back when the price hit $67-70 a barrel. It actually got to $75 a barrel, which in the days of F35 cost overruns is pretty close – but DoE isn’t buying. Second, they just haven’t got the money to buy enough anyway.<\/p>\n
Lee (Jinjoo Lee, WSJ) reports that the sale of 180 million barrels of crude from the SPR last year probably generated some $17.3 billion in proceeds at an average price of $96 per barrel. But of this $17.3 billion, $12.5 billion was set aside for use by Congress in the latest spending bill to fill the gap left by the cancellation of previously scheduled SPR sales for the period 2024 to 2027, according to ClearView Energy Partners.<\/p>\n
This leaves the DoE with $4.8 billion to spend on replenishing the SPR, and, according to Lee, this could only buy 70 million barrels at WTI prices of $70 per barrel. This is less than half of what was released last year.\u00a0\u00a0 Oilprice.com<\/a><\/p><\/blockquote>\n
So Congress and Biden have successfully run the reserves down from close to 600 million barrels down to less than 400 million barrels and we don’t have the money to replenish. Literally spending trillions on everything under the sun, but not replacing what they essentially stole from the American people. Kinda reminds you of Social Security, doesn’t it?<\/p>\n
Obviously this is a far more complex issue than one quick column will address, but I thought you should keep it on your radar.<\/p>\n","protected":false},"excerpt":{"rendered":"