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 disastersâ€”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 SPRâ€”in response to the Libyan conflict last summerâ€”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 barrelsâ€”that’s less oil than Americans consume within two days. Every barrel that is taken out of the SPR needs to be replacedâ€”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 To date, the administration has not replaced the oil withdrawn during last summer’s release and has no plans for doing so.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 â€¦ 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.