Tags: McTague | Strategic | Petroleum | Reserve

Barron's McTague: Strategic Petroleum Reserve Is a 'Boondoggle'

By    |   Tuesday, 19 May 2015 09:00 AM

In theory, the Strategic Petroleum Reserve (SPR), which was created in 1975, offers us a buffer from oil shortages. But reality is a bit different, says Barron's writer Jim McTague.

"Ah, boondoggles! They cost us taxpayers dearly, but they're worth their weight in political gold," he writes. "A boondoggle can birth rare bipartisan consensus among warring Democratic and Republican congressmen."

The $40 billion SPR is a prime example, McTague says. It drains more than $200 million a year to operate.

"The Obama administration wants to spend $1.5 billion to $2 billion for upgrades to this money pit's aging infrastructure," he explains. "Sequestration be damned, the House Energy and Commerce Committee is practically rubber-stamping the wasteful proposal."

Why don't we need the SPR?

"The private market is now capable of responding to the sort of supply disruptions envisioned by President Ford," McTague argues.

"We've got hydraulic fracturing, plus oil-producing Canada and Mexico as good neighbors. The SPR is insurance, all right —for the political class."

Meanwhile, remember all those forecasts of the last 40 years that renewable energy will replace fossil fuels as our primary energy source? Well you can forget them, says Stephen Moore, a distinguished visiting fellow at The Heritage Foundation.

"The green energy movement in America is dead, may it rest in peace," he writes in The Washington Times.

"No, a majority of American energy over the next 20 years is not going to come from windmills and solar panels. One important lesson to be learned from the green energy fad's rapid and expensive demise is that central planning doesn't work."

The shale oil and gas revolution pushed prices way down over the last few years, and that "crushed green energy," Moore says.

Oil prices have plunged 43 percent since late June, and gasoline prices have dropped 26 percent over the last year.

"The shale revolution is a classic disruptive technology advance that has priced the green movement out of the competitive market," Moore explains.

"We don't know if renewables will ever play a significant role in America's energy mix. But if it does happen, it will be a result of market forces, not central planning."

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
In theory, the Strategic Petroleum Reserve (SPR), which was created in 1975, offers us a buffer from oil shortages. But reality is a bit different, says Barron's writer Jim McTague.
McTague, Strategic, Petroleum, Reserve
360
2015-00-19
Tuesday, 19 May 2015 09:00 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved