The president this week continued to tout his so-called “all-of-the-above” energy strategy, but even as the White House has pushed an all out media blitz on gas prices over the past month, the American people still aren’t buying it – nearly two thirds of Americans are unhappy with the president’s performance. In the face of public frustration and continued high prices, the president appears to now be turning to short-term political gimmicks instead of lasting policy solutions.
In a speech yesterday the president denied that more drilling would reduce prices, yet media reports suggest he is close to securing a deal to release oil from the strategic petroleum reserveâ€”a clear admission that more supply will impact prices. The president also claimed that drilling was at a “record high” under his administration, yet he failed to mention that production on federal lands actually declined from 2010 to 2011 by 14 percent. Once again, the president’s rhetoric fails the facts….
Tapping the SPR presents an easy target to score political points, but will do little to combat rising prices over the long-term. When President Obama tapped the SPR last summer, prices were back up within a week. The SPR was intended for emergencies only and was not meant to be a market manipulation tool.
If the president truly embraces an “all-of-the-above” plan, he should call on the Senate to pass some of the bipartisan House bills, which expand access to North American energy sources. Instead, the president lobbied the Senate to block approval of the Keystone XL pipeline. By carrying secure oil from Canada, the Keystone pipeline would present a lasting solution to supply disruptions in the Middle East. The longer we wait for this pipeline the longer we remain vulnerable to political events on the other side of the world.
In Case You Missed Itâ€¦
Using the Strategic Petroleum Reserve Like a Spigot
National Journal, March 15, 2012
By Coral Davenport
In the 36 years since Congress voted to create a Strategic Petroleum Reserve, U.S. presidents have tapped the nation’s emergency oil stockpile only three times.
But in recent years, as gasoline prices have soared, lawmakers, particularly Democrats, have regularly demanded the release of SPR supply to ease pain at the pumpâ€”a move that could also have the short-term political effect of blunting GOP attacks on President Obama.
“It’s like an annual event now. It didn’t used to be, but we’re in a world with much more volatile oil prices,” said Michael Levi, an energy expert at the Council on Foreign Relations. Experts predict Obama has set a precedent for presidents to use the SPR as a tool to lower gas prices. That’s at odds with the reserve’s legal statue, which says that oil is to be released only in the event of a “severe supply disruption.”… And experts say that using the SPR more often could weaken the impact the fresh supply would have on the market.
“Adding cheap oil to the system can jack it up like a sugar high for a little while, and then it wears off,” said Kevin Book, an analyst at ClearView Energy Partners. “Before, the reserve was just for a rainy day. The effect of using it as a spigot, a price-relief mechanismâ€”traders will very quickly price that in. Then its power to reset prices is limited.”
But it’s already possible that Obamaâ€”who released 30 million barrels of oil from the reserves last year in the wake of a price spike following the Arab Springâ€”could become the first president to tap the reserves twice.
Obama has been hammered politically as oil and gas prices rise in part due escalating U.S. tension with Iran over its nuclear programs. On Thursday, Reuters reported… that Obama had discussed a coordinated release of strategic petroleum reserves in a meeting with British Prime Minister David Cameron, although White House press secretary Jay Carney said only that “energy issues” were among the topics the two discussedâ€¦
Read the full article online here.