Tapping The Oil ReserveMarch 8, 2011 6:34 am
From The Washington Post:
President Gerald Ford signed the Energy Policy and Conservation Act in 1975 to establish an oil reserve of up to 1 billion barrels in vast salt caverns near the Gulf Coast. The act did not set a “trigger” for tapping reserves but left the president to determine whether a drawdown would be required by “a severe energy supply interruption” or by U.S. obligations as part of the International Energy Agency (IEA).
“The legislation defines a “severe energy supply interruption” as one which 1) “is, or is likely to be, of significant scope and duration, and of an emergency nature”; 2) “may cause major adverse impact on national safety or the national economy” (including a spike in oil prices); and 3) “results, or is likely to result, from an interruption in the supply of imported petroleum products, or from sabotage or an act of God.”
Many economists and policy makers caution against using the reserve simply to lower prices.”
Definition of Retrospective Distortion:
Retrospective Distortion. This is the problem of explaining or relating or accounting for, “. . . or examining past events without adjusting for the forward passage of time.” (p. 310) This gives rise to the mistaken belief that these events were predictable at the time, This is an illusion, and is closely related to the narrative fallacy since it reflects our need to make sense of sequences of events after the fact.