Homework Blog #5

Sen. Jeff Bingaman called on President Obama this week to be ready to tap the nation's Strategic Petroleum Reserve in response to surging oil and retail gasoline prices. High gas prices alone aren't enough to justify tapping the reserve, but announcing a sale from the reserve would help moderate prices, said Bingaman, chairman of the Senate Resources and Energy Committee.

The president should "be ready to consider a release of oil from our Strategic Petroleum Reserve if the situation in the Libya deteriorates further," Bingaman, D-N.M., said in a Senate floor speech Wednesday. Gasoline has climbed more than 29 cents per gallon since the uprising in Libya began in the middle of February, costing Americans an extra $108 million per day to buy the same amount of fuel. Albuquerqueans are paying an average of $3.32 a gallon at the pump - a 17-cent hike in one week.

"Between the lost production in Libya, the crude-oil dislocation associated with additional Saudi production, and the prospect of further turmoil in the region, we are now unquestionably facing a physical oil supply disruption that is at risk of getting worse before it gets better," Bingaman said. Other lawmakers on Capitol Hill have also urged Obama to tap into the reserve.

The administration said Wednesday it is "confident that the global system has the capacity to deal with major disruptions in oil supply." A spokesman would not address whether Obama was considering options such as opening the Strategic Petroleum Reserve. National pump prices jumped another 4 cents Thursday to a new national average of $3.43 per gallon, according to AAA, Wright Express and Oil Price Information Service.

New Mexico drivers on average are forking over $3.38 for a gallon of unleaded regular. The 18-cent hike in one week represents the biggest one-week increase since September 2005, AAA New Mexico reported Thursday. Albuquerque has the least expensive gasoline in the state at $3.32 a gallon; still, that's a jump of 17 cents. Motorists in Las Cruces are paying the most at $3.36, up 21 cents in a week. The most expensive gas is in Hawaii at $3.82. The lowest in the country is in Montana and Wyoming at $3.12.

"Depending on the city they're driving in, motorists are now paying at least $10 more per fill-up than they were a year ago," said AAA New Mexico spokesman Dan Ronan. "As was the case in 2008, this pocket book issue will likely mean drivers will make changes in the number of trips they take, consolidating them and being more careful about how they drive." Analyst and trader Stephen Schork said gasoline could rise another 32 cents per gallon this spring, peaking as high as $3.80 by summer. Flying is getting more expensive as well. Jet fuel prices have risen about 13 percent in two weeks and are now up 46 percent from a year ago. In turn, U.S. airlines have raised fares six times this year. Last month, they tacked fuel surcharges of $3 to $5 on domestic tickets, something they hadn't done since 2008.

What are your thoughts on this subject? Are gas prices so high that we need to start thinking about this? Do you find it strange that situations occuring in other countries like Libya, can affect our daily lives?
-Noriega