White House denies reports that he and Britain’s prime minister agreed to tap the two nations’ petroleum reserves.
By Christi Parsons and Neela Banerjee, Washington BureauMarch 16, 2012
President Obama launched a fiery defense of his energy policy Thursday amid growing pressure to stem rising gasoline prices, perhaps by releasing oil from the nation’s emergency petroleum reserve.
Obama avoided mentioning the Strategic Petroleum Reserve option, but acknowledged the pain Americans feel at the pump and mocked Republicans for “acting like ‘We’ve got a magic wand and we will give you cheap gas forever.’ “
“We’ve seen it all before; we know better. You know better,” he told a crowd at Prince George’s Community College in Maryland. “There is no such thing as a quick fix when it comes to high gas prices. There’s no silver bullet. Anybody who tells you otherwise isn’t really looking for a solution — they’re trying to ride the political wave of the moment.”
If history is any guide, tapping the reserve would provide only a short reprieve from rising prices. But such a move, which came up in discussions this week with British Prime Minister David Cameron, could underscore Obama’s concerns about the prospect of $5-a-gallon gas as he runs for reelection.
The White House denied news reports that the U.S. and Britain had worked out a deal to release fuel from their stockpiles, though it confirmed that the idea had come up.
“As part of a broad discussion of energy issues, including oil prices, the deployment of reserves was raised,” an Obama administration official said late Thursday. “But no specific plans or agreements were made.”
But even the fleeting belief that there was a deal dampened oil prices for a time.
Benchmark Brent North Sea crude oil in Britain and West Texas Intermediate in the U.S. each fell about $2 a barrel during trading, but they made up most of those losses once officials said no decision had been made.
Politics aside, the economic argument for tapping the U.S. reserve may be strong but not overwhelming. Higher oil prices have pinched American businesses and households, but so far prices haven’t climbed high or fast enough to sap confidence or jolt the economy, as happened a year ago.
Recent economic data suggest the U.S. recovery is gaining momentum. Job growth was strong in the first two months of the year, and retail sales were solid in February, although that partly reflected the warm winter and increased spending on gasoline.
Economists atMoody’sAnalytics estimate that American households are likely to spend about $75 billion more on gas this year than last year. That will eat up roughly half the money Americans will get from the extension of the payroll tax cut this year.
Cameron and Obama met this week to discuss a range of topics, including energy policy. Aides wouldn’t say officially what was discussed, but a Reuters report attributed news of an agreement on tapping the reserves to an unidentified British official.
Speaking to students at New York University on Thursday, Cameron said he and Obama had not come to any decision, but added that releasing oil from the reserves was “something worth looking at.”
“Short-term, should we look at the reserves?” Cameron asked. “Yes, we should.”
Soon after White House Press Secretary Jay Carney said reports of “some sort of agreement” were inaccurate, oil prices began to recover.
The Strategic Petroleum Reserve in the United States is the world’s biggest emergency stockpile of crude oil. It has a little less than 700 million barrels of oil but can hold up to 727 million barrels in four underground salt domes along the Texas and Louisiana coasts.
Created by Congress in the early 1970s in the wake of the Arab oil embargo to deal with supply disruptions, the reserve has occasionally been tapped by presidents in a bid to tamp down rising gas prices, with mixed results.
Releasing the oil typically has only a brief effect on prices, and the administration has been arguing for weeks that Congress should adopt an “all of the above” approach to deal with the issue.
The U.S. should tap domestic sources of oil but also invest in alternative forms of energy, Obama said Thursday. Republican candidates for president are “naysayers” when it comes to technology and energy sources of the future, he charged, citing their frequent calls for more domestic drilling.
“We’ve heard these folks in the past,” Obama said. ” ‘Television won’t last. It’s a flash in the pan.’ … ‘The horse is here to stay but the automobile is only a fad.’
“The point is, there will always be cynics and naysayers who just want to keep on doing things the same way that we’ve always done them,” he said. “They want to double down on the same ideas that got us into some of the mess that we’ve been in. But that’s not who we are as Americans.”
Republicans took issue with the campaign-style riff.
“It’s a little amusing to be lectured on an ‘all of the above’ approach by an administration that’s been blocking energy production on federal land and just successfully lobbied Senate Democrats to defeat the bipartisan Keystone XL pipeline legislation,” said Don Stewart, spokesman for Senate Republican leader Mitch McConnell of Kentucky.
cparsons@latimes.com
neela.banerjee@latimes.com
Times staff writer Don Lee in Washington contributed to this report.
