Uncle Sam is adding 60,000 barrels of oil a day to giant
underground caverns in Texas and Louisiana to be used for the
proverbial "rainy day."
Is it raining yet?
The price of oil is moving closer to $120 a barrel, up almost $19
a barrel for the month. Gasoline stations can barely change their
prices fast enough, and the cost of regular grade hit a record $3.54
a gallon on Wednesday morning, according to GasPriceWatch.com.
The driving club AAA is raising its estimate of Memorial Day pump
prices to $3.75 a gallon, up 25 cents a gallon from its earlier
"At some point, we have to think about whether we have a price
emergency on our hands," says Geoff Sundstrom, a spokesman for AAA
in Heathrow, Fla.
Proponents of the government taking action to ease the crunch say
that storing oil at a time of soaring prices, in what is called the
Strategic Petroleum Reserve (SPR), does not makes sense. Some want
some oil released in the hope that it will drive down prices.
Opponents counter that using the SPR would probably have little
impact. In fact, they maintain, as does President Bush, that there
is no emergency.
But on the campaign trail, the prospect of using the nation's
rainy-day supply is catching on. Last week, Sen. John McCain, the
Republican candidate for president, called for the government to
stopping adding to the reserve. A week ago at a candidates' debate
in Pennsylvania, Sen. Hillary Rodham Clinton (D) said she would not
only stop adding to the reserve, but would also release oil to try
to drive prices down. Sen. Barack Obama, the other Democratic
candidate for president, believes the SPR should be used for short-
term supply disruptions, but he does not believe it should be
currently tapped, according to Jason Grumet, an adviser on energy to
Senator Obama. Like Senator McCain, however, Obama would stop adding
to the SPR at these prices, Mr. Grumet says.
Despite the candidates' wishes, Mr. Bush maintains that the SPR
is off limits, to be used only in the event of a natural catastrophe
or a major supply disruption overseas.
"The Department of Energy will continue to fill the Strategic
Petroleum Reserve at very modest rates to provide an added layer of
protection in cases of severe disruption," says Megan Barnett, a
spokeswoman for the agency in Washington.
The Energy Policy and Conservation Act of 1975 established the
reserve. Signed into law by President Ford, the act gives the
president the sole authority to decide when to release oil from the
reserve. Congress has discussed automatic triggers for release but
has never changed the law.
At issue now are the reserve's 701. …