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Published: May 24, 2008 11:44 pm
Readers' Forum: May 26, 2008
Alorica’s jobs are welcome here
Mark Bennett’s Thursday column headlined “Alorica’s announcement is a solid single for Terre Haute’s economy” was right on.
We are not grateful for the small things. We think they are nothing unless they are as great as we think they should be. But $9 per hour is good for someone who does not have a job. We all would like to make $15 or $20 per hour, but we all do not have the qualifications for that kind of money.
I think we should welcome any company who wants to come here to Terre Haute and bring jobs.
— Ruth Stringer
Terre Haute
Increase supply to lower oil costs
In response to the recent rise in the cost of a barrel of oil, I propose that the Department of Energy completely empty all of the oil in the Strategic Petroleum Reserve onto the open market at the current spot price (I know the Senate recently voted 97-1 to stop filling it but it is my opinion that this will do very little do help bring down the current price of oil).
With the revenue generated from selling all of this oil, the DOE could buy a series of futures contracts (and/or put options) equal to the amount of oil that is currently held in the reserve (or an amount that to what is deemed sufficient).
These contracts should not be immediately purchased — unless of course the Congressional Budget Office or the Government Accountability Office forecasts that the price of oil is not going to subside any time within the foreseeable future — but should be purchased over time via dollar cost averaging so as to “buy low and sell high.”
In the event that the SPR is needed (such as with Hurricane Katrina or, God forbid, an incident of terrorism), the DOE could exercise these contracts with their respective counterparts. Moreover, if the price of oil falls — and a series of futures contracts and/or put options is purchased — and then spikes again, the DOE could then exercise these options (by buying oil lower than the current spot price) and immediately reselling the oil on the open market at the much higher spot price for a substantial profit.
Had this policy been enacted after the oil spikes of the 1970’s, we would have purchased a series of oil futures contracts and/or put options which the DOE could be exercising today — just think of the revenue that this would be generating.
Lastly, I would like to add that the only realistic way — given our current technological limitations and the remarkable efficiency of oil — to address the price of oil is to increase supply. And the only way to increase supply is to bring more oil onto the open market by either encouraging our suppliers to produce more or by producing more here at home (we could auction off the reserves located off the west coast of California and/or in the Arctic National Wildlife Refuge (ANWR) in Alaska).
The current rhetoric of Implementing a windfall profits tax, increasing subsidies to biofuels, enacting a “gas tax holiday,” or continuing to trot the executives of the oil companies in front of Congress does nothing to increase the supply and is therefore ineffective.
Long-term energy alternatives are needed, but the government should not be in the business of picking winners and losers via subsides.
— Travis Walker
Terre Haute
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