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US to Release Oil from Emergency Reserves

  • Kent Klein

Gas Station manager Joseph Sublett changes a sign reflecting reflecting lower prices in Little Rock, Arkansas, June 22, 2011(file photo)

Gas Station manager Joseph Sublett changes a sign reflecting reflecting lower prices in Little Rock, Arkansas, June 22, 2011(file photo)

The Obama administration announced Thursday that it is releasing 30 million barrels of oil from the United States’ emergency reserve to offset production lost because of the fighting in Libya. The U.S. oil will be about half of a 60 million barrel international release.

The United States and the other member nations of the International Energy Agency, or IEA, are trying to head off a resurgence in petroleum prices.

White House officials say more than 140 million barrels of oil production have been lost since the fighting in Libya started earlier this year.

Although oil prices have been falling in recent weeks, White House Press Secretary Jay Carney told reporters that the release of the reserve oil has been discussed for some time. He said the disruption in oil supplies is as real today as it was several weeks ago.

“This is a move by the IEA, which is a 28-member organization, in a coordinated way to address a sustained, significant disruption in our oil supply, caused by the events in Libya," said Carney.

The president’s spokesman said the administration does not predict prices. But President Barack Obama has been under political pressure because of higher gasoline prices and their effect on economic growth.

Republican John Boehner, the Speaker of the House of Representatives, accused the president of using a national security instrument to address his domestic political problems.

In a written statement Thursday, Boehner instead called for a national energy policy which involves increased oil production.

Carney said the release of U.S. strategic oil reserves during the next 30 days is intended to increase market supplies as demand increases when Americans take their summer vacations.

“What we are addressing is an impact caused by a supply disruption," he said. "At this time, it is necessary to do it because we are about to enter into the season when demand is at its highest.”

Although the United States and the other 27 IEA countries reached the decision together, Democratic Representative Edward Markey said the release will protect the U.S. economy and put other oil producers on notice.

“We are an oil-consuming nation," said Markey. "But with today’s announcement, we are sending a message to OPEC [Organization of Petroleum Exporting Countries] and the oil-producing countries that we are not going to have our economy held hostage any longer.”

The U.S. Strategic Petroleum Reserve was established in the 1970s in response to the OPEC oil embargo. The reserve holds a record 727 million barrels of oil stored underground near the Gulf of Mexico coast.

Officials say President Obama is open to releasing more oil from U.S. reserves, but that he has not decided to do so.