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Monday, February 29, 2016

Government does something intelligent

This is not snark.


The federal government is about to do something intelligent: Buy low.

From Paolo Romero:
Amid low oil prices, the Liquefied Petroleum Gas Marketers’ Association (LPGMA) has supported the Department of Energy’s plan to stockpile ready-to-use fuel products and secure some of the country’s future requirements.
“Considering the historical volatility of global oil prices, it would make sense for government to take advantage of inexpensive oil and obtain at a bargain additional fuel supplies for use in extraordinary need,” LPGMA party-list Rep. Arnel Ty said.
The Association of Southeast Asian Nations Petroleum Security Agreement also encourages members to build extra stockpiles, Ty said.
He said due to a great global surplus, the price of oil has plunged 75 percent to around $30 per barrel since the middle of 2014.
He cited forecasts from a number of commodity analysts who expect the price of oil to fall to as low as $18 per barrel, before recovering to $60 per barrel.

I do not know why we need to stockpile oil, but if we are going to, let us do it right.


  1. Better safe than sorry, but we still have several large petroleum reserves in Alaska that the federal government refuses to open up. We should at least start drilling and get easy access to these reserves in case of future needs rather than just let them sit there.

  2. Ahhh, but wouldn't that signal a loss of confidence by the government in Obama's pet wind and solar energy initiatives? Why do we need a huge oil reserve for emergency backup, people will say, when the goal is to be 100% on renewable energy in the future? And not to be overlooked, of course, money spent to purchase cheap oil can't be funneled to the FOBs (Friends of Barack) who will soon be tapped to fund his future library and mausoleum. When it comes to government, "intelligence" is an oxymoron.

  3. The concept of stockpiling oil (The Strategic Petroleum Reserve) was the result of being reliant on foreign oil producers for our energy needs. In the event of a war or some catastrophic global disruption, it made sense to have a reserve supply. In fact, even though much of our production is now domestic it still makes sense. It's like having money in the bank to fix the car's transmission in case it unexpectedly fails.

    As Anonymous above notes: "Better safe than sorry . . . ."

  4. I'm with T. Regardless of "the science is settled", don't nobody know about the future. Surprises happen.

  5. They better hurry and do it before the Green crowd gets wind of it. There's going to be hell to pay.

  6. It is always wise to put liquid and gaseous petroleum products into old, played-out fields for future use. The geology permits it, later extraction is easy, and it mitigates heavy swings in prices.

    I know Michigan does this with natural gas, the utilities injecting gas into the old 'storage' fields in the summer to extract that gas in winter. It helps keep gas prices low because they do not have to bid for supply on the spot market, nor do they have to bid for transportation space on the major interstate pipelines.

    BTW - having export controls lifted only helps American suppliers keep fields supplying and pipelines running. Better to have those Euros, Yen, Yuan, and whatever other currencies coming back here. And if some of that is in US Treasury bonds being sent back here - then it is all good.

    - Mikey NTH

  7. The Old and Unimproved DaveMarch 1, 2016 at 12:45 AM

    "I do not know why we need to stockpile oil"

    It makes Obama cry. Which probably makes it an Act of Grace.

  8. I'd like to stockpile it for the bunker, but it get old.