Crude oil was trading at about $25 per barrel the year that George W. Bush was inaugurated. Within a year, the price actually tumbled to around $17 per barrel. It has done little but climb, climb, climb ever since. The $100 barrel of oil is no longer unimaginable; it's coming, and soon. How much of that is the Bush administration's fault?
Quite a bit if you listen to congressional Democrats, none at all if you're in the Republican camp. Most recently, seven Democratic senators sent a letter to Energy Secretary Samuel Bodman, "respectfully requesting" that the administration "immediately" postpone further deliveries to the nation's Strategic Petroleum Reserve. The reserve is the world's largest emergency petroleum store maintained by any government and can hold some 727 million barrels of crude at a time. According to the Department of Energy's website, the reserve was quite close to capacity at the end of October, capturing 694 million barrels of crude.
Conventional wisdom holds that the government should go into competition against private traders only when markets are sanguine and prices are low. According to a Senate source, Democratic senators are stupefied as to why the administration would be stockpiling oil at a time of record prices and jittery markets. They are not alone. Business media reports quote oil analysts as saying the move makes no sense and seems perfectly timed to drive up the price of oil and further destabilize oil markets.
This month in response, the White House expressed "dismay" over high oil prices, watching those prices rally more than 15 percent between October 8 and 19, "driven by fears about tight winter supply and a weakening U.S. dollar, which has propped up prices for oil and other commodities like gold."
So what exactly explains administration oil policy? Vice President Cheney's Energy Task Force, convened early in the administration's first term, operated largely in secret, so we may never know.
We do know that its recommendations included obviating environmental protections to boost oil extraction from federal lands. But other experts say U.S. reserves, even if drilled to capacity, wouldn't significantly decrease our dependence on foreign oil.
What explains U.S. oil policy? Your guess is as good as mine.