White House: oil price a factor for tapping reserve

WASHINGTON Mon Mar 7, 2011 5:34pm EST

White House Press Secretary Jay Carney holds his daily briefing for reporters at the White House in Washington, February 17, 2011. REUTERS/Jonathan Ernst

White House Press Secretary Jay Carney holds his daily briefing for reporters at the White House in Washington, February 17, 2011.

Credit: Reuters/Jonathan Ernst

Related Topics

WASHINGTON (Reuters) - The White House said on Monday the price of oil was one factor -- but not the only factor -- that would be used when determining whether the United States will tap its strategic oil reserves.

"The price of oil is one of a number of factors that is looked at ... in making that determination, but not the sole factor," White House spokesman Jay Carney told a briefing.

"I wouldn't look to a price threshold. The issue here is disruption -- is there a major disruption in the ... flow of oil. That's obviously a factor."

While longstanding policy is to release reserves only in the event of a significant and immediate supply shortage, some analysts say the Obama administration may feel compelled to try to tamp down high prices being fueled both by outages in Libya and concern unrest could spread in the Middle East.

President Barack Obama declined to comment about the issue when asked about it by a reporter during his meeting with Australian Prime Minister Julia Gillard in the Oval Office on Monday.

White House Chief of Staff William Daley said on Sunday that tapping the reserves was one option the administration was looking at.

Those comments, by Obama's top aide, added weight to the impression that the move was being considered seriously.

Carney said he was not playing down Daley's comments, while emphasizing that they did not signal a policy shift.

"The chief of staff made clear that this is an option on the table and it is an option that we're considering," Carney said. "It's an option we are considering, but there are a number of factors that go into it, and it is not price-based alone."

Higher oil prices could undermine the fragile U.S. economic recovery and damage Obama politically as he moves toward a 2012 re-election bid.

The U.S. Strategic Petroleum Reserve holds 727 million barrels of oil, or about 38 days of consumption, and has only been tapped a handful of times since it was created in the mid-1970s after the Arab oil embargo.

It was last used in 2005 following Hurricane Katrina.

(Editing by Eric Beech)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
Adam_S wrote:
The price of oil, and by extension gasoline, should be noticeably higher than it is in the US. Period. Ditch your huge SUV, and stop thinking a 60 mile roundtrip commute is normal and tolerable.

Mar 07, 2011 2:45pm EST  --  Report as abuse
Ralphooo wrote:
Naturally they would not be withdrawing as much per day as the country typically uses. For one thing, we have domestic crude oil, though not nearly enough to supply our usual daily requirements. Second, oil will still be coming in from places like Canada and Mexico and Venezuela. So the reserve would last much longer than 38 days when used as a supplement. And in an emergency situation, I certainly we would be using a lot less oil than usual. Supplementation could probably go on for a year or more before the reserve gets close to empty.

That said, I think it would be a terrible idea to start using the reserves because the price has risen by $1 to $2. We should keep that reserve for a true emergency. It’s pretty easy to see that something along those lines will eventually occur, and that $4.00 gas is not what it will look like when it does happen. Try gas at $20 or $30 or even more, on a temporary basis, with an inadequate supply available for critical uses.

That would be the time to use the reserve. But what Obama decides to do may depend more on political perceptions than logic.

Mar 07, 2011 3:31pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.