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 hes 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 Foundations 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 cant 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 doesnt 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.
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