Time to Tap Into Oil Reserve?

By Bob Hansen
|  Monday, Mar 7, 2011  |  Updated 8:47 PM PDT
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Time to Tap Into Oil Reserve

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Time to Tap Into Oil Reserve

Prices would come down. But are we at that point?
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The last time the US dipped into the oil reserve it had a direct impact on lowering the price at the pump and we all want lower prices... but is now the right time?

There's no question, it hurts when you fill up your tank.

“I don't even want to get gas. I’m trying to ride my back everywhere,” said a college student.

But that's not always a possibility.  For many folks they say it's either buy gas or forget their job or education.

“It's ridiculous man. Prices are just going up.  It's hard to cope with all your other bills,” said SDSU student Mario Billalpando.

For Donovan McAtamney, every penny increase means less money going into his landscape business.

“Right now we're doing ok but we heard $5 a gallon and that doesn't sit too well.  It's definitely going to pinch the pocket a little bit,” Mcatamney said.

That's why some are calling for the United States to open up it's oil reserve and add millions of gallons of fuel into the US supply.

Would prices come down?

“They certainly would. They would come down if they started putting a million barrels a day on the market. They could certainly affect world prices because at the margin, that extra million would make a significant difference,” said SDSU Economics professor Dan Seiver.

So with gas prices going up every day, is it time to tap into that oil reserve?

“The oil reserve is supposed to be for emergencies,” said Seiver.

He says the high gas prices are not urgent enough to dip into the millions of gallons of stored oil – at least not yet.

“The point is that we don't want to use it just to try and smooth out gasoline prices.  The idea is a major oil disruption is what it's supposed to be what it's for, that would have a dramatic effect on our economy,” said Seiver.

The Government opened the reserve in the early 90's during the first Gulf War and high gas prices dropped 33 percent. They taped the reserve again in 2005 after Hurricane Katrina and prices dropped about 9 percent.

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