There is absolutely no good reason to release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR) this month. Yet that’s exactly what President Obama plans to do. In a coordinated effort with the International Energy Agency, a total of 60 million barrels of oil (30 million from the SPR and 30 million from other countries) will be released into a global market that uses over 84 million barrels a day.
President Obama is once again proving he has no capable energy advisors within his administration. If the world market needed 30 million additional barrels of oil from the United States, it would have been easier for the president to simply lift his drilling moratorium. His own Energy Information Agency estimates that it’s costing us 220,000 barrels a day in the Gulf of Mexico alone (roughly 80 million barrels in 2011 — or nearly three times what we’re draining from the SPR).
Rep. Ed Markey (D-MA), of course, loves the idea of depleting the SPR. Markey is famous for wanting taxpayers to go broke paying for his failed energy idealism. “[T]his is the one tool America has at her disposal to immediately help drive down prices at the pump,” he said. However, that is factually incorrect.
The SPR is not a “tool” to drive down prices whenever the president finds himself politically vulnerable. The release of oil from this national security stockpile is limited by law.
Heritage Foundation energy expert Nick Loris explains: “The Energy Policy and Conservation Act requires a presidential finding that there is a ‘severe energy supply interruption.’ Three conditions must be met: 1) An emergency situation exists and there is a significant reduction in supply which is of significant scope and duration; 2) A severe increase in the price of petroleum products has resulted from such emergency situation; and 3) Such price increase is likely to cause a major adverse impact on the national economy.”
This has not occurred. Again, Loris points out: “Libyan production of oil has been offline for quite some time (roughly a little less than 3 months), but Libya produces 2 percent of the world’s oil (about 1.5 million barrels per day) with most of its oil going to Europe. Does this constitute a significant reduction in supply? Or a severe increase in price? No.”
Karen Harbert, president and CEO of the U.S. Chamber of Commerce’s Energy Institute, said in a statement: “Unrest in the Middle East is likely to continue for quite some time, so a temporary increase in supply is not a substitute for a long-term fix. Our reserve is intended to address true emergencies, not politically inconvenient high prices.”
However, liberals are intent on ignoring these basic fundamentals. They want to manipulate markets to fit a desired end, even if it costs consumers and taxpayers dearly. They know Americans won’t choose incredibly more expensive fuel sources if oil remains cheap. So they must increase the price of oil, but not so fast that it hurts them politically. As President Obama said in 2008, he prefers price increases that are “gradual.”
Gas prices averaged $1.83 when Obama was inaugurated. Since then, Obama’s EPA has imposed new costs on domestic refiners. Obama’s Interior Department has been so negligent in reviewing and issuing drilling permits that they were held in contempt of federal court. Jobs and economic growth have been crushed along the Gulf Coast and across the nation as oil workers, suppliers and local businesses suffer under Obama’s energy policy.
The U.S. Environmental Appeals Board, made up of Obama’s eco-activist allies, also recently declined air quality permits to Shell Oil preventing them from developing 27 billion (with a “b”) barrels of oil off the coast of Alaska. Obama has practically shut down drilling off the Pacific and Atlantic Coasts and in the eastern Gulf. In other words, if Obama wanted more oil on the market, the easiest method is for him to get out of the way and do nothing.
President Obama needs to stop crippling our domestic oil supply and stop using national security resources to serve political ends.
Rory Cooper is Director of Communications at The Heritage Foundation.