Katrina Thoughts: From a distance

Our blogging on Hurricane Katrina will be limited as there are others better positioned to know what they are talking about, not to mention that it's still early yet and we don't know the extent of damage in Louisiana and lower Mississippi. One other pertinent reason: when it comes to preparations or the actual survival of those in Katrina's path, nothing we or anyone else says makes a bit of difference. Only in the aftermath can we be of service, however peripherally.

IT'S OIL AGAIN, NATURALLY that makes major headlines since the central Gulf is home to more than a quarter of America's petroleum production. As of the last hour we are being told by multiple sources (probably quoting one another) that we are losing a million barrels a day of production to Katrina. That's a seriously bad number.

Thus we are not surprised to hear that President Bush may open up at least a portion of the Strategic Oil Reserve to counter the ugly market forces (that means "high prices" in plain-speak).

We have no problem with this. Katrina is a national emergency, not just a regional one. The devil as usual is in the details as to how and to whom the national oil reserves will be released. How? They are located in Louisiana. It might be a day or two before they can be tapped, and then it's the question of "to whom?" Who has the capacity to take the reserves to refine and distribute, and who derives the benefit?

It's also a question of "for how long?" will the reserves be tapped. Severe depletion of the reserve is not a good idea, no matter how tempting it might be to alleviate the price impact at the pump. Let's face it: sooner or later prices will top out as consumer behavior changes.