Sell the oil!

David Henderson makes the case for the US to sell ALL of its Strategic Petroleum Reserve. Excerpt:

The Wall Street Journal's editors do have one legitimate objection. They argue that "Releasing oil for political purposes would make matters worse by removing the incentive for private companies to carry inventories." That's true. And that's why there's an even better reform. There was never much justification for the Strategic Petroleum Reserve in the first place. Private holders of oil have the right incentive to hold inventories if the government can't undercut them by selling when prices are high. But the very existence of the SPR means that inventory holders always have to second-guess the government. There's only way to solve this problem: have the government sell the oil until there's none left. Then the government could reduce the debt by about $16.3 billion (assuming conservatively that it gets an average price of $25 a barrel on its 650 million barrels), bring the price of oil down by $5 a barrel at least, and avoid messing up future incentives for private firms to hold oil reserves. Now there's the right trifecta.