The US is adding 60,000 barrels of oil a day to giant underground caverns in Texas and Louisiana to be used for the proverbial “rainy day.” See this article about howHigh Oil Prices put Focus on Strategic Petroleum Reserve. The US began storing fuel for emergencies in 1975 after oil supplies were cut off during the 1973-74 oil embargo. The Strategic Petroleum Reserve is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels of crude oil, which represents only about 58 days of oil use in this country.

The price of oil is moving closer to $120 a barrel, up almost $19 a barrel for the month and GasPriceWatch.com, the cost of regular grade gasoline hit a record $3.54 a gallon on Wednesday morning.

Interestingly, all three major presidential candidates (John McCain, Hillary Clinton, and Barack Obama at the time of writing) wish to stop adding to the reserve. Sen. John McCain called for the government to stopping adding to the reserve. Sen. Hillary Rodham Clinton (D) said she would not only stop adding to the reserve, but would also release oil to try to drive prices down. Sen. Barack Obama gave a more ambiguous answer: he believes the SPR should be used for short-term supply disruptions, but he does not believe it should be currently tapped. Like Senator McCain, however, Obama would stop adding to the SPR at these prices.

The impetus behind the reserve is obviously somewhat up in the air. It is not clear whether the military would get first dibs on any oil in the reserve if the civilian supply were severely disrupted.

The global shortage of rice continues to be a serious issue. The New York Times wrote this article in the April 17, 2008 issue: A Drought in Australia, a Global Shortage of Rice. Australia’s rice crop has been reduced by 98 percent over the past 6 dry years. It is interesting that grapes are now the fastest-growing crop. The imbalance is obvious: grapes do not feed as many people as rice.