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White House rejects call to tap oil stockpile

The White House on Tuesday rejected a call from House Speaker Nancy Pelosi to release oil supplies from the U.S. Strategic Petroleum Reserve to help bring down fuel prices.
/ Source: msnbc.com news services

The White House on Tuesday rejected a call from House Speaker Nancy Pelosi to release oil supplies from the U.S. Strategic Petroleum Reserve to help bring down fuel prices.

Pelosi called on President Bush to release oil from the government's emergency reserve to knock down gasoline prices she says "are helping push the economy toward recession."

Pelosi, a Democrat, in a letter to Bush on Wednesday noted that the reserve has been used three times before and each time the action has served to stabilize oil markets and lower gas prices.

Action is needed "to assist consumers and strengthen the economy," Pelosi said.

The threats to the economy and national security from high oil prices "are the kind of circumstances ... in which utilization of the Strategic Petroleum Reserve is more than justified," Pelosi wrote in the letter sent late Tuesday.

On Wednesday, the White House slammed Pelosi's proposal, saying the reserve is intended to provide the United States with oil during a severe supply disruption. While oil prices currently are high, at more than $137 a barrel on Wednesday, there has been no supply shortage.

"It has been ineffective when it has been used for price manipulation in the past," said White House spokesman Scott Stanzel.

"Releasing oil from the reserve would reduce the number of days of protection our nation would have in the event of a severe supply disruption. That is harmful to our national security and not in our country's best interests," he said.

Bush repeatedly has rejected calls to use oil from the government reserve, which is 97 percent full and currently holds about 702 million barrels of oil - enough to replace imports for two months. It's stored in salt caverns along the Louisiana and Texas coast.

Recently, Bush reluctantly agreed to halt shipments of about 70,000 barrels of oil a day into the emergency reserve after Congress directed him to do so.

Oil has been released from the emergency stockpile in the past in response to threatened or actual supply interruptions.

About 17 million barrels of oil was made available in 1991 to calm global oil markets shortly before the Gulf War.

Bush turned to the reserves when hurricanes Katrina and Rita disrupted oil supplies in 2005. A total of 21 million barrels were made available to refineries "with great effectiveness to address emergency energy needs in the crisis," according to an Energy Department inspector general's report.

President Bill Clinton in 2000 made available 30 million barrels of oil from the reserve to head off concerns about shortages in heating oil during the upcoming winter.