The Mix: Fred Upton on SPR Release: Can it Make a Difference?
as we move full throttle into the summer driving season, it's those high gasoline prices that are challenging our wallets. Well, to help ease that pain for Americans, the Obama administration announced it's releasing 30 million barrels of oil from the country's emergency stockpile, the Strategic Petroleum Reserve, also known as SPRO. It's the largest release ever. Now, the move came as a surprise to many, in light of the fact that gasoline prices, though at least $1 higher than last year, have been edging down from spring's $4-plus high.
The action is part of an international effort to make up for the loss of 1.5 million barrels a day of light sweet crude from Libya, embroiled in conflict since February. Along with the U.S., 27 other countries of the International Energy Agency are releasing a total of 60 million barrels of oil over the next month, with the U.S. supplying the most, because it is the biggest oil consumer. The 30-day national stockpile contains 727 million barrels, located in underground salt caverns in Louisiana and Texas. President Gerald Ford established the SPRO in 1975, following the Arab oil embargo. Presidents have ordered the reserves opened twice before -- in 2005, after Hurricane Katrina, and during the Persian Gulf War in the early '90s. Some lawmakers are applauding this latest release, saying it's about time.
[REP. ED MARKEY (D) MASSACHUSETTS] We are sending a message to OPEC and the oil-producing countries, that we are not going to have our economy held hostage any longer.
[ASSURAS] Others, like Fred Upton, the powerful Republican chairman of the House Energy and Commerce Committee, are critical. I spoke to Congressman Upton right after the release was announced and asked him if it was the right move.
[UPTON] It's not. I'm glad that they're realizing that supply and demand does mean something, and they're trying to put more supply into the system. But there's -- this SPRO was designed specifically for when we get into a real emergency -- in other words, if something really tragic happened.
[ASSURAS] But the reasoning is that, essentially, this is an emergency, because of the loss of 140 million barrels so far of oil because of the strife in Libya. 1.5 million barrels a day. And also because gasoline prices are high. Those aren't emergencies?
[UPTON] Well, a couple things. The administration has so far blocked the permitting and plans in the Gulf, which allows 1/3 of our oil to come from that region. If they simply say -- and already it's hundreds of thousands of barrels a day, from projections that were made public just, you know, last fall. If they would simply say, "It's time to start again here in this country," whether it's from Canada, Alaska, the Gulf, I think that we could more than make up for what the disruption has been for the Middle East.
[ASSURAS] Thirty days, do you predict there'll be another release?
[UPTON] Well, we'll see. You know, we've got a number of different appropriations, spending bills, that are out there, but again, it completely undermines what SPRO was established for, and that is, you know, if there is a real serious disruption, we want a supply that will continue to help America. By doing this just on prices and ignoring long-term production of oil and gas here in this country is not the right answer.
[ASSURAS] Mr. Chairman, thank you.
President Obama has ordered the release of 30 million barrels from the nation's Strategic Petroleum Reserve, created more than 35 years ago as an emergency stockpile to prevent an economic disaster if the nation's oil imports are suddenly cut off. The president says the release of oil from the U.S. and another 30 million barrels from its allies are needed because of supply losses created by the conflict in Libya. But is this an emergency that warrants tapping the SPR? And what effect will it have on gasoline prices?
Anchor Thalia Assuras interviews Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce Committee. Upton says the move by the president only proves that the country needs to increase domestic production. He believes the same results would come from approving stalled permits for drilling in the Gulf of Mexico, without tapping into reserves he believes were meant for a true emergency. He also hints that Congress could try to limit future SPR releases by amending spending bills.
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