Not yet time to use oil reserves
Dan Yergin is right: it is not yet time to use the Strategic Petroleum Reserve (SPR). Why not?
The 727 billion barrel SPR is intended for use in an oil supply disruption. Libya has partially disrupted its own oil supplies, but they are relatively small, about 1.5 million barrels per day of exports. Oil prices are spiking, but not because of the Libyan supply disruption. As Yergin says, they are anticipating risks in the future, risks like demonstrations in Saudi Arabia that might disrupt the massive supplies that come from its Shia-populated Eastern Province.
We should be urging oil exporting countries to increase their production in response to higher prices, which they are likely to do in any case, and holding our own reserves in reserve for the possibility that things will get worse, possibly much worse. The market is telling us that is a real possibility.
I spent the years 1982-85, when oil prices fell sharply, preparing for an oil supply disruption and the resulting spike in prices as the U.S. representative to the emergency committee at the International Energy Agency. I trust the plans we developed then for a coordinated (with friends and allies) draw of oil stocks early in a supply disruption have been much improved since. Relatively small emergency drawdowns of the SPR were authorized during Desert Storm in 1991 and after Hurricane Katrina in 2005. Loans and exchanges have been used to meet other exigencies.
I understand that there is a real need for the White House to be seen as doing something to counter the rise in oil prices and defend the economic recovery. But there is a real risk that turmoil in the Middle East will eventually disrupt many millions of barrels per day of oil supply, making things much worse than they are today. I’d wait to see the whites of oil disruption’s eyes before using our most important, but inherently limited, weapon to defend against a price spike.
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Just to comment on the no-fly zone possibility. It may be that Gates et al are just throwing sand by suggesting it would be complicated to enforce. The US has already shot down four Libyan planes over the Gulf of Sidra in 1989 & 1981. How many Libyan pilots would want to risk that for Qaddafi now?
Maybe no pilots would want to risk it – but most pilots have families who would be vulnerable to retaliation by Qaddafi if they refused, or ditched the plane, or flew to Malta.
In any case, as Gates explains it, a no-fly zone is more than picking off individual planes. It involves large-scale strikes to ensure that whoever is involved in enforcing the no-flying is not himself shot down. All we need is for Qaddafi to have some American pilots to use as subjects of negotiation for Americans to lose interest in the enterprise pretty fast.
And how much good did no-fly zones do in Kosovo? The Serbs continued with the killing and removal of bodies to parts unknown in Serbia. It was only the threat of ground troops that persuaded Milosevic it was time to make a deal.
I certainly hope our diplomats are provided with extra-thick skins before starting work – they’re going to be criticized no matter what the U.S. does. It would be helpful if the Arab League could get together on this – you’d expect they’d be more interested to a quick end to this than, say, the Russians or Chinese.
I forgot to add – of course I’m for bombing the living daylights out of anything to do with Qaddafi. It’s just that there are so many drawbacks.
If we don’t have the ability to “control” the airspace over the COAST of Libya and shoot down airplanes where they ought not to be, what have we been paying for all these years? This could be done while staying off shore. We do more than this with Preditors.
The use of military force is never as cheap or easy as we civilians always assume it will be. In any case, let’s wait to see how many Arab states are willing to participate – do they have any ability to use those expensive weapons we keep selling them, or are they toys for the boys at the top?
The world’s best hope may be that Qaddhafi’s supporters realize they are being asked to risk death – or maybe worse, permanent disability – to protect Qaddhafi’s ability to leave the country with his family and fortune. Just where will that leave them in a new Libya? Some of them must be beginning to wonder about it.