Obama makes a shift, says tap oil reserves

By Caren Bohan

LANSING, Michigan (Reuters) - Barack Obama proposed tapping the strategic oil reserve on Monday to help lower gas prices, reversing an earlier stance, and called rival John McCain a tool of big oil companies as rising energy costs took center stage in the U.S. presidential campaign.

Obama, celebrating his 47th birthday, unveiled a package of steps designed to end U.S. reliance on oil imports from the Middle East and Venezuela within 10 years, including tax credits for buyers of fuel-efficient hybrid cars.

In a speech in Michigan, a battleground in November's White House election and home to the struggling U.S. auto industry, he proposed releasing 70 million barrels of light oil, easier to refine into gasoline, from the emergency U.S. stockpile.

The Democratic senator from Illinois said the light oil could be replaced later with heavier crude in a swap designed to bring quick relief from high gasoline prices.

"We have to make a serious, nationwide commitment to developing new sources of energy and we have to do it right away," Obama said in Lansing, Michigan.

McCain fired back in Pennsylvania, criticizing Obama's opposition to nuclear power and offshore drilling and calling on Congress and Obama to return to Washington from their summer break to try to solve the country's growing energy challenges.

"Anybody who says that we can achieve energy independence without using and increasing these existing energy resources either doesn't have the experience to meet the challenges we face or isn't giving the American people straight talk," McCain said in Lafayette Hill, a suburb of Philadelphia.

Two daily tracking polls show McCain, a Republican senator from Arizona, has wiped out Obama's narrow national lead in the past week and essentially pulled even in the November 4 election race as the two candidates wage an increasingly acrimonious campaign for the White House.

The faltering U.S. economy, including rising gas prices, rank as the top issue for American voters in most polls.

In a broad speech assessing the country's energy future, Obama called for a $7,000 tax credit to help consumers buy fuel-efficient cars, set a goal of 1 million plug-in hybrid cars on U.S. roads by 2015 and proposed a requirement that 10 percent of U.S. energy comes from renewable sources by the end of his first term.

AD SAYS MCCAIN 'IN OIL'S POCKET'

Obama's new television advertisement noted McCain was "in the pocket" of oil companies. The ad pictured McCain standing with President George W. Bush. "After one president in the pocket of big oil -- we can't afford another," it says.

The McCain camp said the ad failed to mention McCain opposed a 2005 energy bill that provided billions in tax breaks for energy producers, including oil companies. Obama voted for the bill, which was backed by Bush.

The McCain campaign also blasted Obama's proposal on the strategic oil reserve, noting he said just weeks ago that it should be used only for genuine emergencies.

"Tapping the strategic oil reserve is not a substitute for a real plan to increase supply through additional drilling and nuclear power," McCain spokesman Tucker Bounds said.