Photo: Dept. of Energy

Last night, President Obama gave a major speech announcing the drawdown of the U.S. military’s “surge” in Afghanistan. But yesterday offered an even more momentous (although far less obvious) geo-political development: the opening of America’s Strategic Petroleum Reserve for the first time since Hurricane Katrina. The Obama administration plans on released tens of millions of barrels from the SPR’s various locations in the South and Midwest, in an attempt to stave off a possible economic shock caused by increasing resource prices:

The Obama administration has decided to release 30 million barrels of oil from the U.S. Strategic Petroleum Reserve as part of a broader international effort to pump more 60 million barrels onto the world market over the next month.

U.S. Energy Secretary Steven Chu said the release of oil is a response to oil supply disruptions caused by turmoil in the Middle East and North Africa, including Libya.

According to a chart over at the Department of Energy’s official SPR website, this would be the largest release in the Reserve’s history, surpassing even the 11 million barrels that were sold in the aftermath of Hurricane Katrina. It even outstrips the 17 million barrels sold during Operation Desert Storm in 1991, a period when Saddam Hussein’s burning of the Kuwaiti oil fields caused a sudden and potentially-ruinous supply shock. Going by sheer numbers, the current economic and political situation is worse for oil prices than a regional war involving two of the largest petroleum producers on earth.

Or is it? There’s a possibility that the Obama administration is using the SPR as a form of preventative, short-term economic stimulus, rather than in response to bad jobs numbers and conflict in the Middle East. This could turn out to be a shrewd decision. High resource prices, brought on by OPEC’s boycott of the United States, led to a stagflated economy in the late 1970s. Some economists have blamed the severity of the Great Recession on out-of-control oil prices and oil scarcity. The SPR exists as a possible, last-ditch counterbalance to these kinds of potentially-ruinous market forces, since even a temporary stabilization of oil prices could be crucial for an economy that hasn’t quite gotten back on its feet yet.

If the largest sale in the SPC’s history has a tangible effect on oil prices, the fact that the economic recovery even depends on the price of a non-renewable resource—and the fact that the price of resource could depend on a government-controlled emergency stockpile—should be a wake-up call. The economy is basically at the mercy of a resource that should have been made obsolete long ago, and the world is now living with the consequences of failing to develop an alternative.