The Strategic Petroleum Reserve has a capacity of 727 million barrels.
As of April, 700 million barrels were held in the reserve. This should leave 27 million barrels left to fill.
Early this year the Bush Administration indicated it wants to have the reserve full by September. Assuming this is a 7 month effort, that's a rate of about 3.8 million barrels per month or around 128,000 per day. (This is "paid for" by producers who pay their taxes with oil rather than cash).
At best, just because of practical considerations, the reserve can pull out 4 million barrels per day.
Halting additions to the reserve and opening the spigot as wide as it goes will produce a "supply increase" of around 4.2 million barrels per day.
Daily consumption of oil in the United States: 20+ million barrels per day.
Short run demand elasticity of oil vis-a-vis gasoline price: 0.08 - 0.10.
Question 1: What are we to make of this assertion in the Wall Street Journal:
"We are in an extreme circumstance," the senators wrote. "I support an immediate halt in the deposits of domestic crude into the SPR as we enter the busiest driving season of the year."
The letter comes one day after a group of truckers and other citizens arrived at the Capitol asking the government to intervene as prices keep rising. With the average price of gasoline at the pump reaching a record $3.60 a gallon last week, according to government data, truckers and people who get to work by car are struggling.
Question 2: What is the likely impact on gasoline prices of: (a) A halt in additions to the SPR? (b) Opening the spigot as wide as it goes?
Extra credit question: Who finds these people who end up in Congress?