Is the president is playing politics with the U.S. Strategic Petroleum Reserves, a national security inventory that is only supposed to be used for national emergencies? Yes, say both critics and supporters of the president.
All sides agree he is using the reserve to bring down the politically damaging high price of gas, not as a response to a genuine national emergency. The announcement was also made the day after a devastating Federal Reserve Bank forecast of a poor economy for the second half of 2012.
The oil reserve has only been tapped two other times in its 40 year history. The first was during Operation Desert Shield and Operation Desert Storm, the outbreak in the First Gulf War. The second was in the aftermath of Hurricane Katrina. According to the U.S. Department of Energy, 21 million barrels were released during the Gulf War. Following Katrina, 11 million barrels were withdrawn. Today’s draw down of 30 million barrels is fifty percent larger than our record wartime withdrawal.
The administration claims the release was required because of the daily loss of 1.5 million barrel of light, sweet high-quality crude oil from the fighting in Libya. However, hardly any of the Libyan crude ever makes it to the United States — it’s consumed mostly in Europe, specifically by Italy and France.
Further, the Libyan war is more than four months old. Except for an oil spike at the start of NATO bombing, the price of oil has been slowly dropping. Yesterday it settled to a nearly six month low of $95.
“This is kind of a head-scratcher because we’re just not in a situation in the U.S. where we physically need more barrels to meet demand,” Blake Fernandez, an energy analyst at Howard Weil in New Orleans, said in an interview with Bloomberg.
Senator James Inhofe (R-OK), the ranking Republican on the Senate Environment and Public Works Committee, said the presidential claim of a national emergency over Libya at this juncture was “curious” since the White House has refused to define the U.S.-NATO bombing of Libya as a war or “hostilities” as defined under the War Powers Act. The president announced the beginning of U.S. bombing of Libya four months ago on March 19.
“The resources in SPR are only meant to be tapped during national emergencies,” Sen. Inhofe said in a statement. “Yet the president’s justification for sidestepping Congressional authorization is that the operation in Libya is not a war.”
Both critics and supporters of the president agree that the release is more about politics, not a national emergency. “Our reserve is intended to address true emergencies, not politically inconvenient high prices,” Karen Harbert, CEO of the U.S. Chamber of Commerce Energy Institute, said in a statement.
Raymond Learsy, writing in today’s Huffington Post, praised the president’s decision, congratulating him for releasing the oil to reduce prices at the pump. “He has stood idly by watching the price of oil rocket from $33/bbl in February 2009 to over $100/bbl these past weeks,” Learsy wrote. “Bravo Mr. President!”
“Finally,” Learsy write, “President Obama has done what he should have done long ago, and what he promised he would do during his campaign.”
So everyone can agree today. Presidential politics, not a national emergency, seems to be driving today’s action.