Press Releases

04/11/2008

Ask AP

AP answers your questions on the news, from strategic oil reserves to Bear Stearns bailout

By The Associated Press

We're all fed up with spiraling gas and oil prices -- whether it's Mom and Dad filling up the family sedan, truckers tanking up on diesel or homeowners emptying their wallets to pay higher heating bills.

All the while, the U.S. is sitting on hundreds of millions of gallons of crude oil in its strategic reserves. Why not tap these reserves to better match supply with demand and bring down prices?

That's one of the four questions being answered in this installment of "Ask AP," a weekly Q&A column where AP journalists respond to readers' questions about the news.

If you have your own news-related question that you'd like to see answered by an AP reporter or editor, send it to newsquestions(at)ap.org, with "Ask AP" in the subject line. And please include your full name and hometown so they can be published with your question.
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Why is it that with gas prices so high, the national reserves have not been released to help bring down gas prices?
W. Arellano
Albuquerque, N.M.
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The Strategic Petroleum Reserve has 700 million barrels of crude oil, equal to 58 days of U.S. oil imports, in cavernous salt domes on the Gulf Coast. Created after the Arab oil embargo in the early 1970s, it serves as a cushion that, by law, can be used only to counter a "severe energy supply disruption." The law forbids drawing on the reserve to influence prices. While oil prices have soared to more than $100 a barrel, there has been no shortage of either crude oil or gasoline.

The United States has only twice used the reserve to respond to an actual disruption or fear of an impending one: in 1990-91 after Iraq's invasion of Kuwait, and in 2005 after Hurricane Katrina.
H. Josef Hebert
AP Writer, Washington
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Whatever happened to Dan Rostenkowski, the powerful politician from Illinois who was involved in a corruption case some years ago?
Michael Logan
Milwaukee, Wis.
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Former Rep. Dan Rostenkowski, D-Ill., a 36-year House veteran best known as chairman of the powerful Ways and Means Committee, lost his seat in 1994 amid the House Post Office scandal. He was accused of using taxpayer money to buy gifts for friends, of exchanging taxpayer-provided stamps at the House Post Office and of paying congressional salaries to employees who did personal chores for him. Two years later, he pleaded guilty to two counts of mail fraud, paid a $100,000 fine and served 15 months in prison and two months in a halfway house. Rostenkowski later lectured at colleges and served on corporate boards, and was pardoned in 2000 by President Clinton. Now 80, he is president of a Chicago consulting firm, Danross Associates Inc. The National Taxpayers Union estimates he collects a $134,000 federal pension. Rostenkowski and wife LaVerne, who have been married 56 years, lost their youngest of their four daughters to kidney disease and cancer last December. Rostenkowski himself had successful prostate cancer surgery shortly before his corruption plea.
Dennis Conrad
AP Illinois regional reporter, Washington
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I've noticed the increased use of "loan" as a verb replacing "lend." What is AP's policy?
Peter Lorenzo
Roseville, Calif.
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"Friends, Romans, Countrymen, lend me your ears," Mark Anthony eulogizes Julius Caesar in Shakespeare's tragedy. Notice he doesn't say "loan me your ears." According to Webster's, "lend" is a verb and "loan" primarily a noun. H.W. Fowler in Modern English Usage says loan as a verb has been "expelled from idiomatic English," though it still lurks around as a "needless variant." The people with the money seem to agree. Reporting to Congress on lax lending standards, Federal Reserve Chairman Ben Bernanke used "loan" eight times as a noun or modifier, never as a verb. In AP's view, bank on that usage.
David Minthorn
AP Manager for News Administration
"Ask the Editor" columnist, APStylebook.com
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Recently, the U.S. government (the Federal Reserve) stepped into the financial markets and "bailed out" the investment firm Bear Stearns, which was going down the drain. At this time, what is the potential taxpayer financial exposure? In other words, how much could this action cost us?
Richard Driscoll
Winnsboro, S.C.
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The Federal Reserve backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy.

Although the taxpayers are on the hook for the $29 billion, Federal Reserve Chairman Ben Bernanke believes they won't suffer any losses. "I feel reasonably confident that we will be able to recover all of the principal and indeed some interest, and there is some chance of even upside beyond that," he recently told Congress.

Bernanke said the Fed "never lost a penny" in the past from various lending maneuvers.
Jeannine Aversa
AP Economics Writer, Washington