FOR IMMEDIATE RELEASE
February 28, 2012
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CONTACT: Press Office
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Playing Politics with the SPR
WASHINGTON, DC
–As gasoline prices continue to climb, anxiety levels among American
families and small businesses are rising as well. In response to the
potential for panic at the pump, some Democrats
are calling on the president to tap into the nation’s Strategic
Petroleum Reserve. Obama’s Treasury Secretary Timothy Geithner suggested
the administration is considering a possible release, telling CNBC
on Friday, "There's a case for the use of the reserve in some
circumstances, and we'll continue to look at those and evaluate that
carefully.”
While
the SPR presents an easy target to score political points, tapping our
nations energy reserves will do little to combat rising prices and will
threaten our national and energy security.
For Emergencies Only
Congress
created the SPR after the 1970’s Arab oil embargo to mitigate major
supply disruptions. The 727 million barrel reserve is intended for
national security emergencies, major supply shutdowns, and natural
disasters—not political expediency. Desert Storm and Hurricane Katrina
were real energy emergencies that warranted sales from the SPR. While
political tensions with Iran have caused prices to climb in recent
weeks, the situation has not yet escalated to an emergency where
supplies are shut-in. The SPR is vital in the event of a serious supply
disruption. If Iran does close the Strait of Hormuz, as it has
threatened, it is critical to our national and economic security that we
have ample energy reserves on hand.
SPR is a Not a Financial Tool
The
last time President Obama decided to tap into the SPR—in response to
the Libyan conflict last summer—it had no lasting effect on gas prices.
While the announcement did cause crude prices to fall slightly, prices
returned to the pre-release levels within one week. Rather than
increasing market certainty, tapping the SPR would only distort the
market for a short period. In order for prices to stabilize, the market
needs a strong signal that we will have sufficient and secure supplies
over the long term. This is why the SPR is not meant to be a financial
tool. It is only meant to supplant oil supplies that are actively being
denied from reaching market.
Furthermore,
President Obama’s SPR release amounted to 30 million barrels—that’s
less oil than Americans consume within two days. Every barrel that is
taken out of the SPR needs to be replaced—and there is no guarantee of
when and at what price. To date, the administration has not replaced the
oil withdrawn during last summer’s release and has no plans for doing
so.
Shortsighted Politics over Policy Solutions
Tapping
the SPR would be shortsighted politics when what we need are lasting
policy solutions. President Obama has said there are no “quick fixes” to
gas prices, yet this is exactly the story some Democrats are trying to
sell with the SPR. House Democratic Whip Steny Hoyer (D-MD) has opposed
those within his party who want to open up the reserve, stating, “The
higher [the price of gas] gets the more pressure there will be … whether
that will lower prices, I personally am not confident it will do that.”
House
Republicans believe we need solutions that will help stabilize prices
in the short term while securing our energy future for the long term.
That's where the American Energy Initiative comes
in. The House has passed numerous bills to expand to American energy
production and increase access to stable supplies, but these bills still
languish in the Senate. Instead of tapping into our emergency reserves,
we need develop our natural resources, and instead of relying on
imports from unstable regimes overseas, we need to increase our imports
from Canada with approval of the Keystone XL pipeline.
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Michele Kearney's Nuclear Wire
Major Energy and Environmental News and Commentary affecting the Nuclear Industry.
Tuesday, February 28, 2012
Playing Politics with the SPR
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