fairly accurate observations. but it should be pointed out that bush, during the 2000 campaign, criticized clinton for doing exactly the same thing:

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Our own domestic production of crude oil is at lowest level in almost 50 years, since 1954. We have no comprehensive energy policy. Today my opponent, in response to public outcry, proposed that our nation tap into the Strategic Petroleum Reserve. That's bad public policy. The Strategic Reserve is an insurance policy meant for a sudden disruption of our energy supply or for war. Strategic Reserve should not be used as an attempt to drive down oil prices right before an election. It should not be used for short-term political gain at the cost of long-term national security. Mr. Gore is not heeding the advice of members of his own administration and the head of the Federal Reserve Board. In a memo written earlier this month, Secretary of Treasury Lawrence Summers, a member of President Clinton's Cabinet, warned that he and Federal Reserve Chairman Alan Greenspan believe opening the Strategic Reserve would be a major and substantial policy mistake.

source: http://transcripts.cnn.com/TRANSCRIPTS/0009/21/se.03.html

i agree there is a huge risk premium tied-up in the price of oil right now. but markets to some degree have reason to apply such a premium - particularly with the sabre-rattling over iran, the nigerian disruptions, and continued chaos in iraq. furthermore, insatiable demand from growing chinese and indian markets put further upward pressure on oil and worldwide production is expected to peak and then decline on the next decade..

Mark, I think you have to ask yourself why oil prices are so high, not so long ago oil companies were asked to reduce their prices for those hardest hit (eg the poor), not one american oil company agreed to do so (while making record profits), but chavez did agree to do so....only trouble is his offer was refused by the chicago transit authority. If bush wants more people to be able to afford oil then he should either start demanding oil companies start reducing their prices (unlikely) or start demanding people like the chicago transit authority start accepting the lowest prices offered.

Mark,

Bush did the same thing after Katrina. It had no effect because refining capacity did not increase. Till cars can run on unrefined crude, moves like this will have no effect. Be better if he ordered some of those fantastic profits the oil companies are making be used to increase refining capacity. Also, take tariffs off Brazilian ethanol so we can get that cheaper too.

Maybe this is a talisman that we are about to nuke Iran and he is preparing for the ramifications from the civilized world when we do: cutting our oil.

"The Strategic Reserve is an insurance policy meant for a sudden disruption of our energy supply or for war. Strategic Reserve should not be used as an attempt to drive down oil prices right before an election. It should not be used for short-term political gain at the cost of long-term national security."

That was Bush back in September 2000. Now, even though he says that our problem is refining capacity, not oil, Bush wants to tap into our insurance policy purely as a "symbolic move"? My, how times change.

Mark: Yes, I had a little hard disk meltdown a while back, but it's great to be back to stir up some trouble.

"there's no way on earth to economically justify even $40 a barrel oil, let alone $70+"

Im happy to hear arguments in justification of this statement however it seems to me that in a capitalist free market based economy (which i was under the impression republicans supported) the value of a product is exactly what the market is willing to pay for it. Nobody is forced to buy anything, if it is unjustifiably expensive then stop buying it and the price will fall back to a justifiable level. Capitalism falls apart when one person says "oops the markets normally work but they got it wrong this time, so well just fix it this once". I'm not saying that there arent strategies to lower the price of oil, but IMHO they all involve using less of it, even if there are untapped oil reserves around the US and World the lead time to bring them online and the potential per day output of these fields mean that no short term benefits will be seen. Reduction in consumption can be implemented immediately.

Mark,

You hit the nail on the head with this post. It is obviously a symbolic move as most educated people know that refining capacity is the limiting reagent here. Bush is obviously doing this in order to try to gain support from uneducated people. While it may have some effect on gas prices, most people know that we are still going to get hammered by gas prices once the hurricanes start to hit. It barely made it above $3 here after Katrina and it's already $2.90- something currently.

Quite honestly, there is very little the President can do about gas prices. The Democrats would love to tax the hell out of the oil companies but the President would never go for that. I personally believe the root of the problem is the SUV boom of the late 90's to the present. People need to be deterred from buying gas hogs and probably the only way to stop it is to raise registration costs. I personally think anyone who registers a Hummer should pay an extra $500 a year for those monstrosities. And you know anyone who can afford one can afford to pay it.

Again, we have human stupidity to blame for our problems, and this time I'm not talking about the President.

I watched the President's speech today. Perhaps there is a misconception. He does not intend to TAP INTO the strategic oil reserves, he intends to STOP PUTTING OIL INTO the strategic oil reserve for a period of time. That's not quite the same thing as tapping into the reserves. Either way, it is purely symbolic and does nothing to increase the refining capacity, which is where the bottleneck is occurring.

I would think that a temporary moratorium on the federal taxes levied upon gasoline would be a much more significant and compassionate measure to make. But you know the government! Everyone else must tighten their belts. They're not going to give up a penny of the taxes they know they can count on... And according to what I heard today, it's a little more than 12¢ per gallon for the feds anyway. On the other hand, if I could get gas down 12¢ a gallon, I'd be mollified (for a short time).

Dems, thanks for the $3.00 a gallon gas. I will remember it in November. Can we drill offshore now. Can we open up ANWAR now. Can we build another refinery now. Can we build another nuclear plant now.

I heard an interview today on the Rush Limbaugh show with an executive with the American Petroleum Institute, and he was asked about why there haven't been any new refineries built in the last 30 years. His response was quite surprising to me.

He stated that the bureaucracy involved: red tape, feasibility studies, impact statements, etc. was a very burdensome challenge. Instead, he said, the oil companies have expanded their refining capacity at their existing refineries without having to go through all that red tape at about 1/3 the cost in time and money that would be involved in building a new refinery. By retrofitting and enhancing old technologies, he stated, the refineries have been able to increase their refining capacity by quite a bit. Although I don't remember the exact percentage of increased efficiency that he quoted, I do remember that he said it was equivalent to building a new refinery approximately every 3 years. But there is a limit to how much efficiency can be squeezed out of existing refineries, and therefore, I believe, it's still important to build new refineries.

But I'm also very supportive of alternative fuel sources. Solar, Wind, Biomass - they all have a role to play. I'm excited by the potential for small businesses to capitalize upon these up and coming technologies. I'm also eager to buy into these emerging technologies. I also understand that the stock market is by and large, a great crap shoot for those who don't really know their way around...

The one thing I can be assured of is that whether the price of gas goes down in the short or medium term, it will continue to be responsive to the demands of emerging economies such as India and China. Therefore, in my opinion, the time is ripe for the emerging technologies to take their rightful place in our nation's energy paradigm. I'm excited by the opportunities that are out there, and hopeful that our capitalistic system will drive the markets into acceptance of these emerging technologies...

I agree with dbogdan that alternate energy sources are key to controlling energy prices. Investment in thses technologies will also make the Middle East and South America less vital to our national interests and leave no excuse for "peaceful nuclear programs" to exist.