News Release

May 18, 2004

Media Contact: (202) 789-5200

Cato expert: U.S. should tap into the Strategic Petroleum Reserve
Proper management of SPR would allow for its use now

WASHINGTON--Congressional Democrats are calling on President Bush to tap into the Strategic Petroleum Reserve (SPR) as a way to stabilize rising oil prices. Jerry Taylor, Cato Institute director of natural resource studies, today made the following comments regarding the SPR:

"The Democrats are right -- with gasoline and world crude prices surging, it only makes sense to tap into the Strategic Petroleum Reserve (SPR) to the greatest extent possible. The SPR is an expensive insurance policy against a very low probability event -- a catastrophic interruption in U.S. crude imports. While the case for an SPR is dubious because private insurance is easily available (if anyone wants to insure against such an event, the petroleum futures market is always there), if we're going to have an SPR, we should manage it to maximize its returns to the taxpayer. And that means making the SPR available during more likely events such as the temporary but very real price surge we're experiencing at the moment."

To arrange an interview with Taylor, please contact the Cato Institute media relations department at 202-789-5200.