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Day Five: Free Our Oil From Strategic Petroleum Reserve

xperts Agree President Bush Can Act to Immediately Bring Down High Cost of Oil

“I believe that supply and demand fundamentals provide the primary explanation for recent oil price trends. The main fundamental factors are strong world economic growth leading to increased demand, moderate growth in supply outside of the Organization of Petroleum Exporting Countries (OPEC), OPEC members' production decisions, low OPEC spare production capacity, low world inventories, worldwide refining bottlenecks, and ongoing geopolitical risks…we believe the current situation does not meet the criteria for a drawdown and sale of oil from the SPR.” - Letter from Energy Secretary Samuel Bodman, 6/20/08

“The problem, of course, is that gasoline prices are up, which has affected the people here in our country. And one of the main reasons why gasoline prices are up is because crude oil prices are up. And one reason crude oil prices are up is because demand is outstripping supply…And therefore, what can we do about it?” - President Bush, 7/11/08

Speaker Pelosi and House Democrats have called on the President to draw down a small portion of oil in the Strategic Petroleum Reserve (SPR) to immediately expand available supplies, send a strong message to oil speculators, and help reduce the record prices that are helping push the economy toward recession.

Experts agree that releasing small amount of oil from the SPR would have an immediate impact on the price at the pump and ease the pain American consumers are feeling every day.

  • “[a] … drawdown of the SPR to influence prevailing oil prices would be likely.. to produce a meaningful price response…”  -Kevin Book, Senior Vice President, Senior Analyst, Energy Policy, Oil & Alternative Energy, Friedman, Billings, Ramsey & Company, Inc., testimony before the House Select Committee on Energy Independence and Global Warming, 4/24/08
  • “Taking barrels of oil off the market to put in the Reserve puts upward pressure on prices.” -Dr. Frank Rusco, Acting Director, Natural Resources and Environment, Government Accountability Office, 4/24/08
  • Petroleum economist Peter K. Verleger “said in an interview that operators of refineries are responding to the rapid increase in diesel prices by bidding more and more for light, low-sulfur crude. The U.S. could increase the available light-crude supply -- and thus damp the surge in prices -- by putting some of its reserve supply on the market.” [Bloomberg,7/7/08]
  • Goldman Sachs estimated that filling the reserve raised oil prices by as much as $6 a barrel and 25 cents a gallon at the pump. [Investor's Business Daily editorial, 3/8/08]
  • A 2003 report by the Minority Staff of the Permanent Subcommittee on Investigations of the Senate Committee on Governmental Affairs concluded that oil deposits to the SPR drove up crude oil prices by tightening supply and reducing domestic stocks. 
  • “I think that we ought to sell off part of the Strategic Petroleum Reserve, because I think that would drive down the price of oil for the next year and would give you time to get other things happening.” -Newt Gingrich [Fox News, 7/8/08]