In June, Energy Secretary Steven Chu announced that the Obama administration would release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR) “in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery.”
Ever since, I have received letters from Arizonans who wonder why on Earth he would do that. I share their frustration. Like many of the president’s policies, this proposal appears motivated more by electoral politics than sound scientific and economic considerations. It also ignores the most obvious ways to increase domestic supply and thus lower prices — allowing more exploration and development of our own American resources — in favor of what appears to be a political solution with questionable effectiveness.
The SPR, which contains about a 58-day supply of oil, was conceived in response to the 1973-74 Arab oil embargo. It was developed specifically to serve as a national-defense fuel reserve and to give the federal government a tool to respond to disruptions in commercial supplies. And, in fact, it has only been tapped twice since its creation: first after the beginning of the first Gulf War, and then a second time in the aftermath of Hurricane Katrina — both of which posed genuine emergency threats to our oil supply. It’s interesting to note that the SPR was not even tapped during the most recent war in Iraq.
With this is mind, it’s hard to understand how the recent conflict in Libya, a country that produces only about 2.12 percent of the world oil supply could qualify as an emergency worthy of expending elements of our limited strategic supply.
While it is true that civil strife in Libya has put upward pressure on global oil prices, it has not appreciably reduced world oil supplies. And, as a result, tapping the SPR has neither insulated the U.S. from these events, nor done much to reduce oil prices.
The Energy Information Administration reports that crude oil prices have actually risen by nearly 10 dollars per barrel since the SPR was tapped. Tapping the SPR, therefore, appears to have been more of an attempt to show that government is doing “something” about gas prices, rather than a meaningful solution that could provide real relief at the pump. An editorial by the Washington Times concurred, calling the decision to tap the SPR “little more than an act of desperation by a White House that will do anything to avoid the consequences of its own inept policies besides change them.”
If the administration is serious about reducing prices at the pump, it should focus more on fully developing our domestic energy resources. Opening areas such as Alaska’s Arctic National Wildlife Refuge (ANWR) and the shale reserves in several western states, streamlining the permitting process for drilling in the Gulf of Mexico, and increasing domestic refining capacity are examples of policies that will truly reduce fuel prices while increasing our energy independence.
Arizonans have a right to be upset and disappointed by this decision. For my part, I will keep pushing the administration to allow Americans to access and develop more of our own domestic resources — the surest way to lower prices at the pump and reduce our reliance on foreign supplies of oil.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.