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April 26, 2011

Petroleum reserve or recession? Strategy?

Steven Kopitz, affiliated with the Association for the Study of Peak Oil, argues a good case that President Obama might need to tap the Strategic Petroleum Reserve if oil prices rise much higher, in order to prevent a new recession.

But, what would the details of that be? Kopitz has several questions:
(I)f the SPR were deployed, what should be the means? How many barrels should be sold? For how long? At what price? How will we know if we are succeeding? How should we coordinate with other holders of oil reserves like the EU and China? Should we coordinate at all or go it alone? How should we coordinate with Saudi Arabia? Do we ignore them or collaborate?
And, those are all good ones.

Actually, though, that's not, to me, the main thrust of his post.

Rather, it's this series of rhetorical questions:
(D)o we even have a thesis on oil markets and recession? If so, where is that housed in the government? Who is the government expert coordinating oil markets, economic management, and oil diplomacy? Does the function even exist?
He tries to answer all the questions, but, can't do so that well. It is not a limitation on Kopitz but rather a reflection on the government.

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