Vet67to82 (< 20)

$140 Crude ang going up ??

June 26, 2008 – Comments (4) | RELATED TICKERS: DHT , USO , GW

We don't have to sit on our hands while crude goes up. We can work to see that the price of crude goes down. and here's how:

Here's one possibility: 

  The US Strategic Petroleum Reserve (SPR), which the US government started filling in Oct 1977 with 2,646,000 barrels, and which stands at 700,372,000 barrels as of March 2008.

Let's see 700,372,000 bbls x $138/bbl = $96,651,336,000

The USA actually has a HUGE (unrealized long term capital gain) PROFIT on the crude in the SPR.

This is what I've recommended to several US Senators: Sell some of the crude from the SPR, maybe up to 200 million barrels, specifically for use in the USA. The USA has several military bases that are mothballed or on standby with little to no use. Look at where those bases overlap electric grid shortfalls, like California, and New YorK, and build new Nuclear electricity plants. It's green, good for the planet, energy. Run the USA bases off the electricity they produce and sell the surplus electricity to the power companies, as a wholesaler. The USA government would have a steady stream of income, to replenish the SPR, to reduce taxes, to repair and maintain roads, bridges and other infrastrucure that's long been neglected. The construction industry has been hit hard, You'll be putting Americans to work.  The crude in the SPR produces no income. WE PAID for it.
Also, read the US EIA reports of the Bakken crude right here in the USA. Every effort should be made to put more wells into production now. That would be a great location for a brand new refinery. It also wouldn't hurt to look for a dis-used base to put a new refinery for the heavy crude nobody has the refinery capability to process. Another benefit of refining heavy crude ... there's a worldwide shortfall of sulfur supply. Sulfur is needed for a lot of things including agriculture fertilizers.

Here's another benefit: For all these years we've built nothing, no new nuclear power plants, no new refineres, we've been sending a message to OPEC: YOU have NO Competition, charge us what you want! Tell your Senator, tell your Representative we want it yesterday. You'll be sending a message to OPEC: YoU've GOT COMPETITION! Watch the price of crude drop!