Saturday, July 19, 2008

More energy gamemanship

The Hill reports that the Democratic leadership of the House is considering bringing another energy bill up under special up-or-down voting rules that prohibit amendments but require a two-thirds vote. The bill would call for a release of 10 percent of the Strategic Petroleum Reserve (SPR), new rules against oil speculation, and "use-it-or-lose-it" regulations for existing oil leases.

The first provision is irresponsible. The SPR is intended to provide oil in a supply emergency, not to manipulate prices. We're not in a supply emergency now, but could be if tensions with Iran grow worse or if there is a major hurricane in the Gulf of Mexico. The other two propositions are mostly for show, with the last being included only to embarrass Republicans.

In any case, it's all a political game as the bill is unlikely to get enough Republican support to pass.

A final quote in The Hill article provides some insight into the legislators' mindset. Discussing the proposed release from the SPR, Rep. Ed Markey (D-MA) said, "You don't have to deploy it every day. You just have to know when to deploy it, to make sure that the speculators don’t control the price of oil, the American government controls the price of oil."

How about the forces of supply and demand controlling the price of oil?