And this one is really good. A must read. From PoliTits reader Sabaean.

A lot of people are upset over the gas prices, and rightly so. I thought about posting something on Kos or some other blog, but I figured you might be interested in this for yours.

I used to work for the Strategic Petroleum Reserve (SPR-DOE) which holds 75 days worth of normal consumption of USA petroleum. That’s 155 million barrels a day for 75 days. Now we, the tax payers, have already bought this oil, and as matter of fact, bought it over two decades ago. Meaning, when gas was at .55 cents a gallon, we bought all that oil.

Now, we could flood the market with this oil to bring down the price of gas, but the oil companies would find a reason to reduce production, just as they did after Katrina. However, what the oil companies really fear in opening up the SPR is what is called a “drawdown.”

Why?

Until Bush came along, the SPR-DOE and the oil companies had a nice little arrangement going. If say Exxon, was not able to meet their quota, they could borrow oil from the SPR and pay it back when their production exceeded the quota. The oil companies could buy the oil that we paid for at the rate in which we bought it, meaning, if oil is $100 a barrel today, but they could borrow it at the $25 barrel price from 1980, it was a tripling of their money. Before Bush, the markets in oil fluctuated in such a way, the oil companies hedged their bets to pay back the oil when the prices fell again, usually in a seasonal manner.

The arrangement turned into a giant slush fund that the Oil companies could play with to earn money when the market was bad. However, when the Iraq War went out, there were calls from Democrats to open up the SPR to reduce the price on gas. Bush let the oil companies know that nothing, short of the apocalypse, would he allow the opening up the SPR.

What did the oil companies do?

They borrowed, and borrowed and borrowed the oil from the SPR and have yet to pay any of it back. The actual amount of how much we have in reserve was deemed classified for the first time under Bush, so the real amount of actual oil in the SPR is unknown. Publically, it has 75 days worth, but most, if not all, of that is IOU’s.

The term for opening up the reserves in the SPR is called a “drawdown,” and it’s a call to all debtors to repay immediately. Meaning, if they borrowed the oil when it was, say a year ago, when the price was $60 a barrel, but today it’s at $120, the oil companies would lose their asses and would decimate those record profits they’ve been posting. Very scary to them.

Just the thought of a “drawdown” is like your bank calling you up out of the blue one day and saying, “um, yeah, we need to you pay the balance on your house, today. Or else we’ll take over your property.”

If calls went out via the internet for a “drawdown of the SPR” (terms the oil companies understand) they would quickly realize the situation is getting out of their control and reduce the price of gas. Now, I’m not saying this as a pie-in-the-sky theory, it happened before when the oil companies got carried away after the Iraq invasion and gas jumped to $3 gallon from $1.80 before the war. People started to scream “drawdown” and the oil companies blinked.

There is nothing to suggest the same couldn’t happen again. The only thing, someone has to say it.

I agree. Thanks, S.T. for saying it.

Listen, y’all. Make this viral. I know you can do it.