The 30-Million Barrel Question

Mark Green
Posted June 28, 2011

Interesting analysis by The Barrel's John Kingston on last week's decision to release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR).

Kingston writes that the 1 million barrels per day (b/d) to be released from the reserve over a 30-day period is approximately equal to government estimates of the daily yield from the Arctic National Wildlife Refuge (ANWR) - if, in fact, the government ever permitted oil and natural gas development there. He asks:

"So the question is if foes of ANWR drilling like President Obama, Sen. Charles Schumer (Democrat-New York) and Rep. Edward Markey (Democrat-Massachusetts) think an SPR release of 1 million b/d is going to impact markets, which they made clear (last week), why have they consistently dismissed the potential market impact of flows out of ANWR?"

Good question. Besides environmental objections, opposition to opening an airport-sized parcel within ANWR's 19 million acres has rested in part on the argument that the oil there wouldn't have much effect on crude prices.Obviously, the administration and others who oppose ANWR drilling don't believe their own rhetoric on that point - or they wouldn't be so enthusiastic about the virtue of releasing oil from the strategic reserve. Kingston has another question:

"Are they applauding the (International Energy Agency)/SPR release simply because the total release is 60 million b/d rather than just the U.S. portion of 30 million b/d? Does that mean if ANWR could produce 2 million b/d, they'd be in favor of its development?"

OK, so now he's just being argumentative. The larger point is the policy schizophrenia underscored by the SPR release decision - which then underscores the administration's overall incoherency on energy: calling for development of domestic resources while standing in the way of greater access that would secure resources for the future, create jobs and generate tax revenues for government treasuries.