Thirty million barrels of oil will be released from the U.S. Strategic Petroleum Reserve (SPR) as part of a larger deal worked out with the International Energy Agency (IEA), a 28 member nation organization created to provide a collective response to major disruptions in oil supply. The IEA, including the United States, plans to release 60 million barrels of oil in doses of 2 million barrels a day for 30 days. That means that the United States, through President Obama, has agree to put up half of the total amount; leaving 27 nations to come up with the other half.

That’s not a very good deal, and when one considers that we are approaching spending 70% of our collected revenues just to pay down our debt; it’s not very wise economics considering that the United States is not facing an energy emergency. For the first three months of 2011, the United States imported the following monthly quantities from Libya:

January 2011: 1,767,000 barrels

February 2011: 969,000 barrels

March 2011: 960,000 barrels

Compare these totals with those imports from other nations, both OPEC and Non-OPEC and decide for yourself if we need an emergency response from the SPR at this time.

Our SPRs were purchased when oil prices were much lower. To replenish the 30 million barrels that are about to be released, the United States will have to repurchase an equal amount of oil at much higher prices. This is like you giving away a popsicle purchased for $0.25 and then having to buy one for yourself at $3.00.

Under the circumstances, one has to wonder why anyone would agree to such a deal and to such a disproportionate division of responsibilities among the other member nations. The White House claims to be making the move to cover disruptions coming from Libya, but it is doing so at a time when oil prices are actually falling; not rising. Some traders see this maneuver as a way to force prices even lower by encouraging commodity traders to short sell in order to make money. But such a maneuver is only good for a short burst; then prices climb again to the same or even higher levels.

If you think back to just a month or so ago, you will be able to recall President Obama encouraging Brazil to increase their efforts at offshore drilling and promising them assistance with technology to develop her reserves and that the United States would be its best customer. All the while he was and still is encouraging other nations to drill and sell to us, he has been using his various executive departments to slow down issuing drilling permits for rigs that were shut down and for any new drilling applications as well. He is also stalling a plan to pipe oil from Canada’s tar sands to Houston, TX where refineries would be able to process oil into various grades of gasoline needed to lower prices at the pump.

The key that signals that President Obama’s decision is nothing more than politics is that while flooding the oil market temporarily will drop prices, it will only do so for a limited time. On the other hand, if the United States were to aggressively reissue existing drilling permits as well as permits where new and expansive oil fields exist within our borders, the drop in prices would be sustained for a much longer period of time. By limiting drilling and new supply sources internally, President Obama’s policies are encouraging traders to go long, which drives prices up and holds them there. He is offering a short-term illusion of relief while keeping a choke-hold on the nation’s energy supplies regarding fossil fuels to appease his base while doing nothing of significance to secure our true long-term energy security.

The most immediate method of lowering gas prices is to cut the various blends of gasoline refineries are forced to constantly shift in and out of. Having 50+ blends of gasoline only limits the available quantity of each type due to limited refining capacity. Under this circumstance, a child can figure out that supply will regularly fall below demand on a seasonal or regional basis. We all know, or at least I hope we all know that when demand exceeds supply, prices go up accordingly and in proportion to the level of demand. But, the President has no plan to deal with blends or refineries and when one omits a detail that obvious from one’s energy plan, it is clear that energy as security is not the goal; rather energy needs are left to vacillate with political needs.

By opening up the reserves and driving prices down, the White House is creating the illusion that it is doing something positive with respect to getting a handle on the economy. It is not; as I demonstrated above, such impressions are illusions that serve to put the President in a positive light; albeit temporarily.

Worse still is the fact that as Commander-In-Chief, the President is also putting the lives and well-being of U.S. troops at risk with his idiotic and broadly advertised plan to draw down troops at a higher than advised rate in order to curry favor with his base and give the illusion of a victory in Afghanistan. I intend to put up more on this topic at another time. Stay tuned. In the interim, let’s hope that General Petraeus will continue to speak out and hold the welfare of the nation above that of what remains of his career. We have enough political generals; we’re overdue for one with the courage of a General Patton or General MacArthur who will honor his troops by keeping Washington’s feet to the fire.