Tipping point for oil seen at $150 per barrel

[Geee]

Washington Times:

A top Federal Reserve official on Monday said the central bank should react if oil prices soar as high as $150 a barrel because prices that high could throw the economy back into recession.

Meanwhile, the White House is considering releasing oil from the Strategic Petroleum Reserve to curb the rapid rise in prices since unrest broke out in the Middle East last month. Within weeks, the price of premium crude has jumped from near $90 to more than $106 per barrel in New York trading Monday.

Although both moves are aimed at easing public consternation over the run-up of prices at the pump to more than $3.50 a gallon on average for regular gasoline, they also likely would rile conservatives in Congress.

The strategic reserve has been tapped only during emergencies, such as the Persian Gulf War, while critics say further easing by the Fed would only stoke oil-fed inflation while doing little to help the economy.

Divisions have emerged on the Federal Reserve Board over what to do, but many members appear to side with Chairman Ben S. Bernanke, who hinted in testimony last week that the central bank might react if oil prices go too high.

[clearvision]

A new "tipping" point. That phrase is so goreish.

[Sanguine]

I suspect we may have tipped already.

[AceRimmer]

I can already hear Obambi saying we need to invest more taxpayer $ into windmills and solar panels...

[Pepper]

More money is going to wind power than solar thanks to the wackos.

 

We need to drill here and now

We need to build nuclear power plants

with the aim of being energy independent and keeping money here

 

(Might even create a job or two in the process)^sarcasm

[Geee]

AceRimmer:

 

http://www.therightreasons.net/index.php?/topic/30136-meet-the-new-ethanol-wind-blows-past-corn-as-subsidy-king-no-end-in-sight/

 

About subsidies for windmills surpassing ethanol.

[Pepper]

AceRimmer

 

What is with this weird fascination with certain numbers? Why not 140, 139, 129

 

Won't we adjust? We drive less, use less, price eventually goes down.

 

The fact that the WH is considering the release of the SPR shows what alarmists they are.

[SrWoodchuck]

AceRimmer

 

What is with this weird fascination with certain numbers? Why not 140, 139, 129

 

Won't we adjust? We drive less, use less, price eventually goes down.

 

The fact that the WH is considering the release of the SPR shows what alarmists they are.

I saw a graph of when they wanted Reagan to tap the SPR & he refused & ordered higher domestic oil production instead. That line dropped like a hot rock.

 

Obama & ilk have always said they wanted $5 a gallon at least.....to coerce encourage alternative energies. They're such idiots, they see an end-goal, but not any hazardous side effects, like increasing the price of almost everything.

 

......or maybe they do.

 

 

PS: What ever happened to good old "Cow Tipping?"

[Pepper]

http://4.bp.blogspot.com/_vkE6clryLFo/TNquPjKoAFI/AAAAAAAAAKA/woSNkQT6qMc/s1600/No+Cow+Tipping.jpg

[Casino67]

Personally, I feel the SPR should not be touched because of price. I think it should only be accessed if there is a disruption of our oil supply. Eventually, there is going to be a war in the ME and oil flow will certainly be disrupted, that is when we will need the SPR.

[Pepper]

They are supposed to have the SPR at a billion barrel reserve, but they're still in the process. That was a directive 6 years ago.

 

See excerpt from

 

http://www.fe.doe.gov/programs/reserves/publications/Pubs-SPR/Annual_Report_2009_Final.pdf

 

 

Expansion to One Billion Barrels

 

The Energy Policy Act of 2005 (EPAct 2005) (P.L. 109-58), enacted on August 8, 2005, directed the Secretary of Energy to expand and fill the Strategic Petroleum Reserve to its authorized one billion barrel capacity, as expeditiously as practicable without incurring excessive costs or appreciably affecting the price of petroleum products to consumers. In response, the Department of Energy (DOE) completed an Environmental Impact Statement, selecting two existing sites (Bayou Choctaw and Big Hill) for expansion, and proposed development of a new site at Richton, Mississippi. An expansion plan was submitted to Congress in 2007.

 

During 2009, DOE continued work to finalize a Supplemental Environmental Impact Statement initiated in March 2008 to address three major issues with the Richton site development: the source of water to leach the storage caverns, the location for the oil terminal in Pascagoula, and the location of the brine discharge pipeline in the Gulf of Mexico.

 

Through FY 2009, Congress appropriated $56.5 million ($25 million in FY 2008 for land acquisition activities and $31.5 million in FY 2009 for expansion activities beyond land acquisition) for the Richton expansion site. However, language included in Omnibus Appropriations Act, 2009 (P.L. 111-8) restricted use of the FY 2009 funds until submission of a report to the Congress on the effects of expansion of the Strategic Petroleum Reserve on the domestic petroleum market.

In October 2009, Congress appropriated for FY 2010 $25 million for Richton expansion activities.

 

Geotechnical Concerns

 

In FY 2010, funds were also authorized for purchase of an existing privately-owned 10 million barrel cavern to replace a cavern at the Bayou Choctaw site that is experiencing structural problems that pose an environmental risk. Completion of the purchase and development of the cavern will add approximately 7 million barrels of net capacity to the Bayou Choctaw site.

 

Environment, Safety, and Health

 

The Strategic Petroleum Reserve program operates with an Environmental Management System (EMS) that is certified to the International Organization for Standardization (ISO) 14001 Standard (2004 version). Since 2000, the scope of the EMS recognized under certification included only the Management and Operations contractor.

 

In 2009, the scope of the EMS was broadened to include the Strategic Petroleum Reserve construction management contractor, AGSC. DOE is involved in the EMS through the Strategic Petroleum Reserve Integrated Safety Management System (ISM), of which the EMS serves as the environmental leg. In 2009, the reorganized EMS was successfully recertified to the ISO 14001 Standard.

 

The Strategic Petroleum Reserve storage sites continue to operate under the Occupational Safety and Health Administration’s (OSHA) V oluntary Protection Program (VPP) certification with all four sites having maintained their Star status throughout 2009. Additionally, all four sites won OSHA and Department of Energy VPP performance awards.

 

The Strategic Petroleum Reserve storage sites were recipients of several awards for management quality, environmental stewardship, and safety management systems. In 2009, the Strategic Petroleum Reserve received the Office of Fossil Energy Excellence in Environment, Security, Safety, and Health (ESS&H) Award for “Using Coordinated, Proactive Programs to Lower Injury and Illness Rates, Improve Employee Care, and Prevent Injuries in Today’s Workforce.” This award was presented to the Strategic Petroleum Reserve for a holistic, proactive approach to wellness and injury prevention.

 

 

 

What is comforting is to realize that they may not have the additional 250 million barrel reserve but the Strategic Petroleum Reserve got an award for a holistic, proactive approach to wellness and injury prevention.