OGJ Washington Editor
WASHINGTON, DC, Mar. 8 -- The White House confirmed that it is considering the release of crude oil stored in the US Strategic Petroleum Reserve. “But there are a number of factors that go into it, and it is not price-based alone,” Presidential Press Sec. Jay Carney said on Mar. 7.
“We're very cognizant of the fact that Americans are experiencing a sharp rise in prices at the gas pump, and that affects them and their family budgets. And we are monitoring that very closely,” Carney said during the regular daily press briefing. “Meanwhile, we are in discussions with oil-producing countries, as well as the [International Energy Agency], about the various options that are available in the global system to deal with a major disruption, should that occur.”
His statement followed White House Chief of Staff Bill Daley’s response on Mar. 6, as he appeared on NBC’s Meet the Press, that “we’re looking at the options.”
Daley said, “It is something that only has been done on very rare occasions. There’s a bunch of factors that have to be looked at, and it’s not just the price…. I think there’s no one who doubts that the uncertainty in the Middle East right now has caused this tremendous increase in the last couple of weeks.”
The reserve was established in 1975 following the Arab oil embargo and historically has been used only for supply interruptions. It was tapped most recently after Hurricane Katrina severely damaged crude oil import infrastructure along the Gulf Coast in 2005.
Congressional Democrats have urged its use for the past week as global crude prices have risen in response to political unrest in the Middle East, particularly in Libya where fighting has reached its oil export terminals.
“There is reason to be concerned that the situation in Libya and throughout the region could become worse before it improves,” Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said on Mar. 3. “I don’t know that it’s useful to try to predict the most likely outcome, but the reality is that many of the potential scenarios are not good for the stability of world oil flows.”
Tapping the SPR would “send a strong signal to oil markets that the US would not allow a physical oil shortage to develop,” Bingaman said.
Republicans have responded that encouraging more US crude oil development would be more effective. US House Energy and Natural Resources Committee Chairman Doc Hastings (R-Wash.) announced on Mar. 7 that the committee would hold hearings on Mar. 17 and Mar. 31 to examine the impacts of rising gasoline prices.
“Americans know what $4/gal gasoline feels like and they don’t want to go back to those days. They remember how it strained their monthly budget, increased costs for all types of goods, and forced tough trade-offs on where and how to spend money,” he said. “A return of that scenario would cost jobs and destroy any hope of economic recovery.”
Contact Nick Snow at email@example.com.
Release of crude from SPR is an option, White House confirms