White House: No release of oil reserves

March 16, 2012 at 1:06 PM
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WASHINGTON, March 16 (UPI) -- The White House has denied news reports that U.S. President Barack Obama and British Prime Minister David Cameron agreed to release oil from strategic petroleum reserves to ease gasoline prices.

White House spokesman Jay Carney said Thursday: "It is inaccurate, as was reported today, that any kind of agreement was reached on a course of action or that any kind of timetable associated with a course of action was agreed to."

The Los Angeles Times quoted an unnamed Obama administration official as saying late Thursday: "As part of a broad discussion of energy issues, including oil prices, the deployment of reserves was raised," in discussions between and Obama and Cameron during the prime minister's visit to Washington this week. "But no specific plans or agreements were made."

Obama has faced criticism from Republican lawmakers and presidential candidates over increasing gasoline prices.

After the report Thursday of the Obama-Cameron action, crude prices dropped more than $2 a barrel to a one-month low of $103.78, The Wall Street Journal reports.

Last summer, the White House approved the release of 30 million barrels of oil from the SPR, the world's largest strategic reserve, in response to supply losses from Libya that officials said were threatening the economic recovery.

Prior to that, President George H.W. Bush tapped the SPR in 1991 during Operation Desert Storm, and President George W. Bush also did in 2005 after Hurricane Katrina.

"When the SPR is used, it tends to have a short-term impact," Richard Newell, a former administrator of the Energy Information Administration, told The Hill newspaper earlier this month.

Noting that oil should be released from the SPR only when there are major supply disruptions, Newell said, "I don't think we're currently in that situation."

But in a Feb. 22 to Obama, three House Democrats -- Reps. Ed Markey, D-Mass.; Rosa DeLauro, D-Conn.; and Peter Welch, D-Vt. -- urged Obama to consider releasing oil from the SPR in order to lower gas prices.

"It is essential that the United States have an aggressive strategy for releasing oil from the Strategic Petroleum Reserve to combat the speculators capitalizing on the fear in oil markets," they wrote.

"Signaling that the United States will continue to employ an aggressive SPR policy in the near term would send a strong signal to oil markets responding to the unrest in the Middle East."

But U.S. Sen. Lisa Murkowski, R-Alaska and the ranking member on the Senate Energy and Natural Resources Committee, in a March 1 letter to Obama, advised against opening the SPR.

"The Strategic Petroleum Reserve exists first and foremost as a critical safety net to be used in times of real emergency, rather than a lever to be pulled for political reasons," she wrote. "Rising gas prices are hurting us all but draining the SPR just before we may have a critical need for it would be both shortsighted and reckless."

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