President Barack Obama has decided to sell 30 million barrels of oil from the nation’s Strategic Petroleum Reserve on the premise that doing so will offset supply disruptions caused by political turmoil in Libya. Of course, he didn’t act alone; he was acting in concert with 28 member countries of the International Energy Agency who agreed to release 60 million barrels of oil reserves. Still, a lot of people are dismayed by the move.
Sen. James Inhofe (R-Okla.)
U.S. Sen. Jim Inhofe (R-Okla.), the ranking member of the Senate Committee on Environment and Public Works and a senior member of the Senate Armed Services Committee, released a statement about the president’s decision:
“President Obama’s decision to tap the Strategic Petroleum Reserve due to unrest in Libya is curious to say the least. The resources in the SPR are only meant to be tapped during national emergencies. Yet the President’s justification for sidestepping Congressional authorization is that the operation in Libya is not a war effort but solely a humanitarian mission. Given the announcement today, are we to assume that the operation has changed course? The President needs to provide a full explanation for this.”
After explaining that the SPR has been used under emergency circumstances only twice — once during Operation Desert Storm in 1991 and once after Hurricane Katrina in 2005 — Senator Inhofe added more concerns:
“Today’s announcement further demonstrates the critical need for the United States to increase domestic energy production. Contrary to what President Obama likes to claim, we have plenty of resources here at home. In fact, we have 163 billion barrels of recoverable oil-that’s 5,400 times more oil than what Obama wants to release from the SPR. The biggest impediment to developing these resources is this Administration.”
The American Petroleum Institute, which represents 470 oil and natural gas companies, also released a statement outlining the organization’s concerns about the president’s decision:
“The release makes little sense for American markets. Crude and gasoline inventories are above average, and crude and gasoline prices have been trending down for weeks, despite the loss of Libyan oil, which markets have already adjusted to. The SPR was intended to be used for supply emergencies.
“There is no supply emergency. We don’t know what impacts this might have on markets long term. But we could and should be taking steps that would increase our own production by 2 million barrels a day or more for decades, which is possible if the government would grant much greater access to America’s ample oil and natural gas reserves. This would do vastly more to help consumers, increase energy security, create jobs and deliver more revenue to our government. It’s action that would truly strengthen our energy future, not a temporary gesture that has no lasting benefits.”
Finally, the Shallow Water Energy Security Coalition, a group of companies — including Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas — that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico, issued this statement:
“Today’s action by the administration to release 30 million barrels of oil from our strategic petroleum reserves represents the latest example of its seemingly ad hoc approach to managing U.S. energy policy.
“Only weeks ago, the administration was publicly taking credit for record high production levels in the Gulf of Mexico that, in reality, are the result of previous administrations’ policies – and are already projected to decline sharply in coming months due to the sluggish permitting process in effect in the Gulf. The administration has also attempted to paper over the extent of the Gulf permitting delays, claiming that the BOEM’s current approval rate of 6 shallow-water permits per month mirrors “historical averages” that, upon further scrutiny, turned out to represent a selective slice of history in which permitting activity had temporarily slowed due to economic factors.
“While releasing supply from U.S. strategic reserves may make a short-term difference, Americans paying record-high prices at the pump should ask this administration why it has taken so little substantive action to date to manage the country’s longer-term supply needs. It is time for a more serious approach to U.S. energy policy. The BOEM must fulfill its fundamental duty to review and issue permits in a timely manner so the country can go forward with safe and responsible energy production in the Gulf.”
According to the nonpartisan Congressional Research Service, the United States has 163 billion barrels of recoverable oil, which is enough to maintain our current levels of production and replace our imports from the Middle East for more than 50 years.
Writing for the Heritage Foundation, Nicolas Loris offered what is arguably the best advise to President Obama: Open Areas to Drilling, Don’t Open the Strategic Petroleum Reserve.
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