OPINION:
COMMMENTARYCongress has backed up its threat to block the U.S. government from purchasing oil for the Strategic Petroleum Reserve (SPR). Both houses voted Tuesday to halt the practice, although the bill still requires reconciliation.
Some believe the legislation would bring gasoline prices down. In reality, however, shutting down the oil supply to the SPR would jeopardize the security of the United States and infringe upon the executive authority of the president to ensure the nation’s defense while having no appreciable effect on gas prices. Congress should leave the SPR alone.
The SPR is a 700 million-barrel emergency store of oil maintained by the national government for a very rainy day: a war or a sudden interruption of the oil supply from one or more of the unstable countries — Venezuela, Nigeria and the Persian Gulf states — from which the United States buys fuel.
Established after the 1973”1974 oil embargo, the SPR gives the president a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy. It also allows the United States to meet part of its International Energy Agency obligation to maintain emergency oil stocks and provides a national defense fuel reserve.
As President Bush has said, the U.S. is addicted to foreign oil: It imports 64 percent of the 10 million barrels per day that it consumes, and the habit is growing. Oil accounts for 40 percent of U.S. energy consumption, most of it for transportation. Unless and until the United States is no longer hooked on oil, having a reliable emergency stock is vital, especially in today’s volatile world.
In his Jan. 23, 2007, State of the Union Address, the president announced his decision to expand the SPR to 1.5 billion barrels “to further protect America against disruptions to our oil supply.”
The nation’s need for an expanded SPR is based on growing U.S. consumption, increased imports, U.S. obligations under the International Energy Program, which requires that the United States maintain a 90-day stockpile of petroleum imports. This is the minimum that a superpower should have for a global emergency.
The Strategic Petroleum Reserve is, first and foremost, a tool of national security policy. It was never intended that the SPR would be used to tamper with the market or to play politics, that its oil would be released to bring down prices, or that we would stop filling the SPR to accommodate either the market or short-term electoral interests in the campaign season.
Regrettably, those who are supposed to be in charge of this policy would like to appear to be “doing something” for voters on the painful gas price issue. Thus, the Democrat-sponsored Consumer First Energy Act of 2008, Title III, Sec. 301, would suspend oil acquisition for the SPR. Beyond that, the Democrats are effectively suggesting that the president not resume filling the Reserve — possibly ever.
The legislation’s authors would like to tamper arbitrarily with the market price of oil, suggesting the president may resume acquisition of oil for the SPR only if the weighted average oil price falls under $75 per barrel for three months. The Democrats even want to tamper with existing contracts by instructing the energy secretary to “negotiate a deferral of the delivery of the oil for a period of not less than one year.” The Republican-proposed Domestic Energy Production Act echoed the same theme: It would have suspended SPR oil acquisition for 180 days.
Neither approach will work, and both could be dangerous. Cutting supply to the SPR could jeopardize America’s ability to respond to crises around the world, to fulfill its international obligations, and to protect the homeland and our allies.
It is unlikely that the availability of the additional, rather insignificant quantity of oil at issue — only 70,000 barrels a day — could make a serious dent in today’s skyrocketing oil prices. The U.S. Energy Information Administration has already forecast that, at best, the price of oil might drop by $2 a barrel, cutting gasoline prices by between 4 cents and 5 cents per gallon.
Moreover, 70,000 barrels of oil is only one-twentieth of what drilling in the Arctic National Wildlife Refuge (ANWR) would produce and possibly only up to one-fiftieth of what the United States could produce if exploration and drilling were allowed along the East and West U.S. Continental Shelves and in the Gulf of Mexico.
Stopping SPR replenishment would be literally penny-wise and pound-foolish, as the result could be a shortage of fuel that denies the U.S. military operational freedom in a crisis.
And congressional tampering with presidential authority to fill the SPR may be unconstitutional as it interferes with the executive branch’s authority to conduct national security policy and defend the country.
Congress should refrain from further tampering with the SPR, for both national security and economic reasons. Such matters of national security are within the constitutional authority of the president. The language in the Consumer First Energy Act of 2008 and the Domestic Energy Production Act of 2008 would do more harm than good to U.S. energy security and will not decrease gasoline prices.
The SPR should be filled to 1.5 billion barrels as the president requested and Congress should not interfere further. But if legislation reaches his desk, President Bush would be well-advised to veto it.
Ariel Cohen is senior research fellow in Russian and Eurasian studies and international energy at the Heritage Foundation.
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