Conservatives Fear Foolhardy Barack Obama Will Release Oil Reserves

By: Nancy Smith | Posted: March 19, 2012 3:55 AM
Barack Obama

President Barack Obama | Credit: Matt Ortega - Flickr

Conservative authorities claim President Barack Obama should not be entertaining ideas of releasing oil from the U.S. Strategic Petroleum Reserve (SPR).

And though the president says he’s doing no such thing, a British official with knowledge of the discussion confirmed Obama raised the issue during a broad bilateral meeting with British Prime Minister David Cameron last week.

In fact, Obama called for that solution as a candidate in 2008 when gasoline prices neared $4 per gallon.

Both the prime minister and the president are known to be extremely concerned that instability in the Middle East and talk of a war between Israel and Iran could drive up oil prices with serious consequences for global economic recovery.

Stephen Allison, a retired economic assistant with Strategic Petroleum Reserve, told Sunshine State News Sunday that releasing oil from the Reserve is still not a good idea for anything but the very short term.

The SPR, managed by the Department of Energy (DOE), exists for moments of national crisis when there is a dramatic disruption in oil supplies, Allison said. The current high prices at the pump are a national concern, but playing politics with a national security asset is not the way to address the problem.

He said the global oil market can adjust to supply disruptions. Releasing reserves now simply allows the administration to avoid addressing the underlying problem with U.S. energy policy.

The Heritage Foundation’s David Kreutzer also claims an SPR oil release is a bad idea. “If there is going to be a one-shot injection into the system, the price will drop during the injection and bounce back after it stops. The speculators simply kept that price dip/jump from being bigger than it otherwise would have been by buying as the oil was released and reselling when the release stopped.”

Crude oil production on federal and Indian lands decreased 13 percent from 739 million barrels in fiscal 2010 to 646 million barrels in fiscal 2011. Production of crude oil on federal lands is dominated by offshore production, which fell by 17 percent in fiscal 2011, notably due to government actions taken following the oil spill in the Gulf of Mexico in 2010.

According to Heritage's Kreutzer, ramping up production on federal lands where we do have access will bring more supply to offset higher global demand.

President Obama admitted in his weekly address Saturday that he can’t do much to lower gas prices, and renewed his call for Congress to end tax breaks for oil companies.

“The truth is, the price of gas depends on a lot of factors that are often beyond our control,” the president said. "Unrest in the Middle East can tighten global oil supply. Growing nations like China or India adding cars to the road increases demand.”

In 2008, Obama stood in front of a gas station near Indianapolis and pledged to “take steps to reduce the price of oil.” He focused on long-term actions such as increasing fuel efficiency standards and promoting clean energy, which he has done as president. Those measures have yet to show they are working.

The first words Obama delivered publicly after David Cameron's departure from Washington were on the problem of U.S. gas prices.

The idea of releasing oil stocks has happened in the U.K. before. In June last year the U.K. and its partners in the International Energy Agency (IEA) released 60 million barrels of oil with the U.K. contributing 3 million.

In the U.S., oil reserves were tapped in 2005 after Hurricane Katrina and at the time of Iraq's invasion of Kuwait in 1990/91.

Whether there is any truth to the rumor of a joint U.S.-U.K. oil release from the respective reserves, it doesn’t matter, says Heritage. The idea is nothing more than a temporary political fix -- one that could make us worse off, should events deteriorate further in the Middle East.

Obama's approval ratings have come under pressure from rising gasoline prices, which have hit seasonal record highs, and the White House is eager to show exasperated Americans that it is doing all it can to keep fuel costs in check.

Republicans are bound to see an SPR release as a gimmick to appease voters during an election year.

Reach Nancy Smith at nsmith@sunshinestatenews.com or at (850) 727-0859.

Comments (4)

Jim McClellan
2:41PM MAY 7TH 2012
"The speculators simply kept that price dip/jump from being bigger than it otherwise would have been by buying as the oil was released and reselling when the release stopped."

Bull. We've not yet had a "shortage" of oil. We've had speculators anticipating one and putting artificial demands on the market, driving up prices long before actual supply and demand came into play. Randomly releasing some of the reserves is a good way to make that ploy more risky, reducing the inflated demand caused by speculators.
Franklin Thompson
6:51PM MAR 20TH 2012
Wouldn't that be like drilling for our own oil in order to bring prices down?
9:43PM MAR 19TH 2012
Oh yes, once again we have some conservatives speaking with forked tongues. I mean it can't be like any Republican candidates and conservative think tanks (e.g. Cato) have EVER screamed to open up (or even drain) the Strategic Petroleum Reserves, correct? As Johnny Carson might say - Wrong, you Texas Tea breath, black crude dispoiler. A fairly quick googling will openly display the hypocrisy.
Pat Galbraith
6:52AM MAR 19TH 2012
Politics? Duh! Let's see, increasing the supply of oil, even the small amount in the SPR, may lower the price ofd gasoline but increasing the supply of oil out of the ground won't. Make sense in this government.

If twenty years ago we had opened up ANWR, and piped it over to Dead Horse, that oil would be coming down the Alyeska pipeline now. Instead it is flowing less and less every day. The excuse then was it would take ten years and wouldn't solve our immediate problems. Same general comment on the Keystone XL extension except this time it's for environmental concerns. That pipeline has been studied and there are already thousands of miles of pipeline crossing over the Ogallala. Our government is now considering fracking controversial while at the same time praising increased oil and gas production - on private land. They also have avowed to destroy the coal industry. We have centuries worth of coal so, obviously, stop using it.

Sec Chu said we should have the same gasoline prices as Europe. Yeah, they've pulled back on that one - for now. But that's the policy.

But we do guarantee loans for offshore drilling - in Mexico and Brazil. And how much have you heard about Scarabeo 9 - it's drilling 55 miles off Key West in 5600 feet of water. An impressive rig.

Leave a Comment on This Story

The content of this field is kept private and will not be shown publicly.
To prevent automated spam submissions leave this field empty.