Another idea, raised but so far not implemented by the Clinton administration, is to force down prices by selling off some of the government's Strategic Petroleum Reserve. Democrats have been roasting Republicans for trying, only last year, to get rid of the Strategic Petroleum Reserve entirely. But the existing price crunch only confirms the wisdom of that effort. The SPR, it has become clear, serves as either a debilitating interference with normal markets or a pointless burden to taxpayers, depending on what we do with it. In Texas and other oil states, it is well-known that the surest way to make a small fortune in the oil business is to start with a large one.
Producers get no aid from Washington when the market is glutted and prices are low.
But when prices suddenly turn upward, they have to worry that the president will step in to keep them from making up any of their losses. The SPR is really no help to consumers. Because inventories held by private suppliers are low. Partly because the only reason for companies to maintain large inventories is to make a killing when prices are high. But if the federal government threatens to drive down prices whenever they reach a lucrative level, there is no reason for anyone else to keep some oil in reserve for a rainy day.