Pulling back the reins on gas prices

President Bush can and should send a message to the oil industry by at least entertaining the idea of tapping the nation's reserves in an attempt to bring down gas prices.

He need only look to the actions of his father for the dramatic impact he could have.

In 1991, George Bush Sr. announced he had authorized the Energy Department to sell as much as 2.5 million barrels a day from the nation's stockpile, which now stands at some 660 million barrels and is being increased daily.

The price of oil, which had been nearing $40 a barrel, immediately began to tumble. It didn't even take a day for the price to fall all the way to $21.44.

As Alan Reynolds wrote recently for the CATO Institute, the elder Bush's move "was like adding another Iraq overnight" to the world's oil production.

"Cutting oil prices in half was not a negligible effect; nor was it temporary," Reynolds continued. "Oil remained at or below $20 until late 1999. Ironically, the United States did not even have to sell much oil. The announcement alone was enough to shock traders, forcing them to liquidate futures and options for whatever they could get. They never found out if the president was bluffing. But they knew he had a lot more oil than they did."

A similar announcement now - yes, the United States will consider putting some of its reserves on the market - likely would slow the spiraling costs. At the same time, the government could stop purchasing the 160,000 barrels a day that is being added to the reserve, at a high cost both to the federal deficit and the taxpayers who buy gasoline.

Although the price of a gallon of gasoline is always a combustible political issue, there is a great deal at stake. The national economy has just begun to hit on all cylinders, and runaway gas prices - like runaway electrical prices four years ago - could quickly put the brakes on the recovery.

Whether Bush thinks gas prices will be a factor at the polls, the state of the national economy certainly will play large. And all the industry needs is a push in the right direction from the president.