It was just leaked that President Bush intends to recommend a doubling of the US Strategic Petroleum Reserve in his State of the Union address. I hope that is not true but fear that it is. A doubling of the reserve over the next two decades would take us to 1.5 billion barrels and approximately 125 days of current net imported oil. I can understand why President Bush might want to fill more tanks at a time when oil prices are relatively low. However, I am “Dubya-ous” about this “strategery.” You would think that he would like to avoid the inevitable and repetitive claim that he is in the pocket of the US oil industry and handholding the Saudis. This SPR doubling will fuel those suspicions once again and have the potential to spike oil prices, which are up $2 per barrel on the news. While I am concerned about the impact of higher oil prices in general due to demand from BRIC and emerging market growth, it is understandable. What I am struggling with is a curious interpretation of this policy. Currently, the IEA suggests that countries maintain reserves equal to 90 days of net imported oil. As I previously calculated, the President’s new target would give us 125 days worth of reserves (based on current consumption.) I am concerned why we need that much. You either have to assume that we will be consuming much more oil over the next two decades or we will have some need to have excess days of reserve. At the 90-day reserve level, the math implies that we will be consuming 16.67 million barrels per day by the time the reserve hits 1.5 billion barrels. That is a 40% increase in our consumption and I am “misconfused” about how that squares with another comment he is expected to make tonight - that we cut our gas consumption by 20% over the next 10 years. So if he wants us to cut gas consumption and reduce our dependence on oil, why do we need more oil in reserve? I can imagine why that would happen in a world where many oil producing countries have an increasing hatred towards the US and may want to use their oil as an economic weapon. But I really hope that is not why we need to increase the reserve.