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White House denies U.S.-U.K. agreement on tapping oil reserves
http://fuelfix.com/blog/2012/03/15/white-house-denies-u-s-u-k-agreement-on-tapping-oil-reserves/
March 15, 2012 at 1:23 pm

by Puneet Kollipara

The White House has denied reports earlier Thursday that the United States and Britain agreed to cooperate on a plan to release some oil from their strategic reserves to counter rising global crude prices that have boosted gasoline prices.

Citing unnamed administration sources, Reuters reported that a formal request from the U.S. to the U.K. to join forces in releasing oil from government-controlled reserves is expected to occur “shortly,” following a meeting between President Obama and Prime Minister David Cameron in Washington. Britain will agree to cooperate, a source told the news service. But White House spokesman Jay Carney, while acknowledging the two leaders discussed energy issues, shot down the report as inaccurate.

“It is inaccurate, as was reported today, that any kind of agreement was reached on a course of action or that any kind of timetable associated with a course of action was agreed to,” Carney told a news briefing.

Obama has faced political pressure from Republicans and his Democratic allies in Congress to do something to address gasoline prices — even though analysts attribute the rise mostly to higher oil prices brought on by Middle East tensions and note that presidents and lawmakers have little power to address pump prices in the short term.

Republicans have called for more oil-and-gas drilling, but analysts have said such measures wouldn’t have any short-term impact on the price of oil, the major determinant of what consumers pay at the pump. Meanwhile Democratic lawmakers including Rep. Ed Markey, D-Mass., ranking member of the House Natural Resources Committee, have pressed Obama to release oil from the Strategic Petroleum Reserve, a 700-million-barrel emergency stockpile along the Gulf Coast.

Sarah Emerson, president of Energy Security Analysis Inc., a research firm, has said the petroleum reserve is meant for use in supply emergencies, and not as a price-smoothing tool.

More recently, Sen. Chuck Schumer, D-N.Y., sounded an optimistic note upon news that Saudi Arabia had said it would boost its production to offset decreases in Iranian supplies. “It is the best news on a very bad front … and let us hope it brings together some good news,” Schumer said.

Republicans argue that the U.S. should develop its own resources, not rely on foreign oil from the volatile Middle East.

Obama has gone on a speaking blitz in the United States recently, trying to defend his administration’s record on oil and gas production while characterizing GOP drilling proposals as an election-year “bumper sticker” that wouldn’t help reduce oil prices right now. He has said a balanced approach involving, oil, gas, as well as renewables and efficiency improvements to cut U.S. oil use, stands the best chance of reducing the nation’s vulnerability to the whims of global crude-oil markets.

He has noted that U.S. oil production has steadily risen and net imports have declined.

“So do not tell me that we’re not drilling. We’re drilling all over this country,” Obama said in Largo, Md., at a speech on energy.

The liberal Center for American Progress and environmental activists have cited that point as evidence that increasing domestic production hasn’t lowered and won’t lower oil prices in the short term at the very least.

Republicans say U.S. oil output has increased in spite of Obama, that he has pushed policies that impede production on the federal lands and waters and that he should do more to promote drilling. They also have pushed him to approve the Keystone XL oil pipeline, which many environmentalists and Democrats oppose and which he has declined to approve pending a necessary additional environmental review.

Republican legislation to approve the oil-sands crude pipeline from Canada to Gulf Coast refineries, open a part of the Arctic National Wildlife Refuge and new offshore waters for drilling and require commercial oil-shale leases failed in the Democratic-held Senate this week and last week. The GOP-controlled House passed an energy bill with those measures in February, but it was dead on arrival in the upper chamber.

“Clearly, if we opened up more domestic production and bought oil from Canada and created 3 million barrels that we don’t have today, people would see that as a positive sign,” Sen. Lindsey Graham, R-S.C., told Energy Secretary Steven Chu at a hearing on Capitol Hill.

Obama said Thursday that his administration has leased millions of acres already and will continue auctioning off areas in the Gulf of Mexico for drilling. But he has pushed back against Republican demands that he allow drilling in a massive swath of new waters and federal lands, reiterating his longtime argument that the country cannot drill its way to lower gas prices.

“I guess there are a few spots where we aren’t drilling. We’re not drilling in the National Mall,” he joked at a speech in Largo, Md. “We’re not drilling at your house. I guess we could try to have like, you know, 200 oil rigs in the middle of the Chesapeake Bay.”