WASHINGTON — Call it the high-mileage economy.
Gas prices in Washington, D.C., hit a three-year high early last week, as prices across the U.S. reached their highest point since 2014.
Demand for gas in Washington, D.C., soars on weekends and at the end of the week, according to GasBuddy, a website that tracks local gas prices and gives alerts on stations with low prices. Now, AAA figures, drivers in the nation’s capital will spend as much on fuel for their weekend trips as they do for a typical full-time employee making the average wage in the nation’s capital, according to the Society of American Business Editors and Writers.
So, with gas prices climbing quickly and rising crude oil prices topping $70 a barrel, some people are asking if the federal government should release the nation’s petroleum reserve. While the long-term effect of a reserve release could be counterintuitive, given the increase in gas prices, some experts are calling on President Donald Trump to consider a release if oil prices start to climb much higher.
The National Petroleum Council, a government advisory group, said in a recent study that a release of more than 500 million barrels “would likely be negligible on global oil prices, domestic or international oil production or gasoline prices.”
But in a letter to the president, 31 members of Congress — including Sen. Cory Gardner, R-Colo., Sen. Marco Rubio, R-Fla., and Rep. Dana Rohrabacher, R-Calif. — said oil and gas reserves could be better put to use than “accelerating the demise of the traditional, family-based automobile and substituting it with ‘clean’ fuels and technologies of the future.”
A release of the reserves is “even more justified now, because global demand for crude is so high, it is threatening to flood the world oil market, forcing up prices and triggering a sharp increase in energy costs,” they wrote.
Oil prices are near $70 a barrel and that’s because of production cuts by OPEC and non-OPEC member nations, former Washington and New Orleans oilman Danny Reif wrote last month on the energy market news website Gulf States Energy.
“In the months ahead, the oil market looks like it is going to heat up even more. Growing demand from China and India, geopolitical upheaval in Iran and North Korea, continuing increases in U.S. oil production, and a dramatic rebound in the price of energy commodities, including gasoline, could drive oil prices up to $100 a barrel by the end of the year,” Reif wrote.
There is precedent for such a release.
In late 2014, amid the oil market crash, the government released 60 million barrels of oil into the marketplace in what were described as a corrective measure. The U.S. had formed the Strategic Petroleum Reserve in the 1970s as a safety net for motorists during recessionary times.
A federal release of reserves would likely be met with a challenge from Texas, which could play off the oil belt states including Texas, Louisiana and Oklahoma, according to one expert.
“What the Gulf Coast would say, depending on how it’s distributed, is that it is diluting their daily supply of crude oil,” Howard Bragman, a media and marketing consultant who has been involved in oil exploration, said in an interview. “I don’t think we’d get a whole lot of support from Midwestern and Eastern refiners. The oils boom has been years in the making and folks just don’t see how the Strategic Petroleum Reserve could change anything.”
Bragman pointed out that a full release would also have significant political implications, given the amount of oil stored along the Texas/Louisiana/Arkansas Gulf Coast, where Hurricane Harvey dealt a significant blow to production capacity. At that point, there’s about 813 million barrels of reserves, Bragman said.
“If the worst happened and the Strategic Petroleum Reserve was saturated, if it became all usable for any unforeseen event, that was a whole different conversation,” he said.
But refiners in North Dakota, Montana and Washington State — whose production has been seriously curtailed by that storms — would likely welcome a release of reserves, Bragman said.
Some politicians, like Sen. Ed Markey, D-Mass., who’s a Democrat, said the release would be needed to reduce energy costs for families and drivers and bolster domestic producers.
“With gas prices up more than 25 cents a gallon in just the last month alone, and the national average for a