If They're Right....

[Joods]

Okay, so I have a question that maybe all of those way smarter than me can answer.

If the US has a ten year supply of oil reserves, and refuses to utilize it for the American people, why are we holding onto it? Clearly, we suffered a crisis back in 2003 when we saw gas prices take a huge hike. In the 12 years since that has happened, prices have only fallen back to just around $2.00 per gallon. It was around $1.20 when the hike started.
I know why the hike happened, what I don't understand is why our government won't release those reserves. Clearly we do get oil from several places that aren't in the middle east. So why the heavy dependence on foreign oil?

[Minimalist]

There is a glut of crude oil on the market.  Energy stocks tanked today and crude oiled closed at less than $40 barrel. 

http://www.nytimes.com/2015/12/08/busine....html?_r=0

OPEC Won’t Cut Drilling, and Prices Plunge 5%

HOUSTON — Crude oil prices slid a further 5 percent on Monday to fall to their lowest levels since the 2009 global recession, pummeled by the fading chance that Saudi Arabia would cut production to halt the commodity’s yearlong slide.

In only 16 months global oil prices have collapsed from over $110 a barrel to less than half that, and the oil industry in the United States and around the world is reeling from its worst crisis since the late 1990s. On Monday, the American benchmark broke the $38-a-barrel mark, a price that makes drilling and completing wells a losing proposition in almost all oil fields around the country.

[Joods]

Is that in answer to my questions? Just wanting to know. I know much of this is way over my head. I'm willing to learn though.

[Minimalist]

Yes.  The world is awash in crude oil.  A lot of that had to do with the US energy companies desire to poison us with fracking.  OPEC decided to try to force them out of business by starting a price war.  It has not worked.

http://www.bloomberg.com/news/articles/2...s-imf-says

Saudis Risk Draining Financial Assets in 5 Years, IMF Says

Saudi Arabia may run out of financial assets needed to support spending within five years if the government maintains current policies, the International Monetary Fund said, underscoring the need of measures to shore up public finances amid the drop in oil prices.

Not the worst outcome, eh?  

[Joods]

Agreed. And I only have a slight understanding of fracking. I know it's a bad thing for the environment because of the wastewater getting into the drinking water supply. Tonight is just not my night for smarts, I guess.

[Minimalist]

Don't forget the earthquakes!

http://www.ibtimes.com/oklahoma-earthqua...ng-2138124

Oklahoma Earthquakes 2015: Tremors Rise As Oklahoma Officials Struggle To Stem Fracking Wastewater Flow

[Joods]

Great.... just great.

[dyresand]

Well isn't that just dandy...

[Minimalist]

[popeyespappy]

Okay, so I have a question that maybe all of those way smarter than me can answer.

If the US has a ten year supply of oil reserves, and refuses to utilize it for the American people, why are we holding onto it? Clearly, we suffered a crisis back in 2003 when we saw gas prices take a huge hike. In the 12 years since that has happened, prices have only fallen back to just around $2.00 per gallon. It was around $1.20 when the hike started.
I know why the hike happened, what I don't understand is why our government won't release those reserves. Clearly we do get oil from several places that aren't in the middle east. So why the heavy dependence on foreign oil?

Judi I'm curious where the 10 years worth of oil reserves number comes from. Are you talking about oil in the ground or oil already sitting in storage containers? The US's strategic reserves, oil owned by the government already sitting in storage containers, is enough to replace imports for about three months. We've got a shitload in the ground. More than Saudi Arabia. But most of that is shale oil. It is both expensive to extract and a lot worse for the environment to do so. Back to the strategic reserves though three months isn't a lot. Not nearly enough to run the Saudis out of business. Plus most of it is oil we purchased at higher prices than what we can currently buy new for. Selling it right now would be a big economic hit.