If oil is America’s addiction, the crack houses are located in places named Bryan Mound, West Hackberry and Bayou Choctaw.
In these sites along the Gulf Coast, the United States puts in storage its Strategic Petroleum Reserve. As of Monday, the inventory stood at about 703 million barrels of oil.
Two things you should know about this. One, the oil is categorized as sweet or sour, which gives it the feel of a Chinese menu item. Two, the reserves reside in salt caverns, which allows for less expensive storage and a full range of flavors.
American leaders set up the Strategic Petroleum Reserve in 1975 as a reaction to an Arab oil embargo. In case of another supply disruption, the United States stands ready to accommodate its energy demands, at least for a couple of months.
As gas-pump pain becomes a national ailment, a suggestion picked up popularity to start reducing the federally held petroleum reserves. This would allow a greater supply in the crude oil marketplace, the theory goes, and thus reduce gas prices.
To the extent that economic theories make sense to ordinary folks, this has potential. The reserve is a rainy-day fund. Look outside. It’s raining pocketbook misery.
How this ranks in the handful of price-reduction solutions is hard to say.
The gas-tax holiday feels a little gimmicky, sort of like the 2006 proposal by desperate congressional candidates to give taxpayers $100, or less than three fill-ups, to appease their anger over high fuel costs.
No rebate developed.
With this reserve program in question, a reader called recently about another. Worldwide food shortages got his attention. He wondered why land set aside for the Conservation Reserve Program couldn’t be put into production to increase supply.
The CRP is a voluntary program that pays landowners to keep highly erodible land out of production. Initiated in 1985, the Department of Agriculture program aims to help water quality and preserve soil productivity, among other things.
Our nation keeps nearly 35 million acres in this reserve capacity. For this, taxpayers provided $1.84 billion in 2006. Nearly $108 million of that money came into Missouri, including $784,529 for Buchanan County landowners.
Statistics from the USDA show that the 6th District, which takes in Northwest Missouri, has the most idled cropland of the nine congressional districts in the state.
So, the reader suggested, why not cut back on the CRP and put those acres to work for the world’s hungry?
Actually, the market is meeting the idea.
Between March 2006 and March 2008, nearly 1.3 million acres have come out of the national CRP, including 111,710 acres from Missouri. The program started with cropland abundant and commodity prices low. Today, with a growing food need and an increasing number of acres required to produce biofuels, the landscape of reserve looks different.
The reserve programs, petroleum and conservation, do their part for the national interest. In a land of plenty, they have a proper role. Trouble is, Americans no longer see the land of plenty. They see distress that might be eased with different policies.
In troubled times, holding back resources has become a luxury.
Ken Newton’s column runs on Tuesdays and Sundays.
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