By: Doug Roth

Back in April, Joe Donnelly announced his plan to lower gas prices by about 25 cents. All the local news stations covered the story, and on April 24, 2008, Donnelly even sent an open letter to President Bush with his plan for “immediate relief.” Donnelly and his liberal colleagues in the House of Representatives eventually got their way, but has anyone noticed a drastic drop in prices at the pump? I surely have not. The reason is because Joe’s relief plan was to suspend shipments to the Strategic Petroleum Reserve, which would bring about 70,000 more barrels of oil to market per day. Sounds like quite a bit of oil until you take into consideration U.S. demand is nearly 20,000,000 barrels per day. Suspending SPR shipments is just a drop in the bucket, a plan that University of Notre Dame economist Tom Gresik claims will only have an impact for “about 5 days.”

So what was the impact you may ask? Well, the bill passed, and shipments were suspended on July 1. On June 30, oil was being traded at $139.96 and gas was at a nationwide average of about $4.14. One week later, with an extra 70,000 barrels of oil per day, gas was at $4.16 and oil was $141.37. Some relief, Joe! In fact, oil was trading above the June 30 levels for more than two weeks beyond the suspension of SPR shipments, and gas did not fall below $4.14 for three weeks.

When will Joe Donnelly and his liberal friends finally accept the concept of supply and demand? Like it or not, oil drives our economy, and although we must work to change that, it is not going to happen over night. With no immediate substantial change in the demand for oil, it is essential for us to increase the supply of oil by pursuing increased domestic production. Increasing the supply of oil by less than one half of one percent through suspension of shipments to the SPR is not relief. It is a political gimmick used to make Joe Donnelly appear to be concerned with your painful experiences at the gas pump.

This entry was posted on Monday, August 4th, 2008 at 5:14 am and is filed under Energy Policy, Gas Prices, Joe Donnelly. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.