Everybody is in a bad mood. Maybe what we need is to use favorable circumstances to change the whole narrative. My proposal is that the US government should sell off one third of the strategic oil reserves over a period of a couple of years.
Oil production in the United States is rapidly increasing and we are importing less oil. So why do we need such a large strategic reserve of government owned oil?
Consider the economic consequences. Just talk of dumping crude oil on the market will reduce gas prices - one of the most important factors in how consumers feel about the economy. Rising consumer confidence will boost the economy and boost employment. Lower gas prices mean people will have more discretionary income. The ripple effects will mean lower inflation and more corporate profits.
For the government, the sell of oil will lower the deficit. A better economy will improve tax collections and help keep interest rates low. All of which will further reduce the deficit and adds to economic growth.
Okay, there will be some losers. The oil companies and those sections of the country booming with drilling will all howl about how this would endanger national security. The head of OPEC will frown. This would be the worst nightmare for the oil market speculators who do not see it coming.
Companies who produce alternatives to fossil fuels would be hurt some, too. But lower fuel prices would reduce the pressure to build the Keystone Pipeline importing oil from Canadian tar sands. Risky drilling in the very deep waters of the Gulf of Mexico becomes less economically viable. Admittedly, selling off a part of the strategic reserve is something of a mixed bag environmentally.
The reserve holds over 690 million barrels of oil worth more than $60 billion. Sell of the oil would produce several billion dollars in profits since the average cost of the oil was only $28 a barrel. Crude oil currently sells at $90 to $95 a barrel.
http://en.wikipedia.org/..._(United_States)
We do need a strategic reserve for emergencies. But not as large as when we were importing most of our crude oil.