Rep. Fred Upton tells Newsmax that the Obama administration made the wrong move in releasing 30 million barrels of oil from the Strategic Petroleum Reserve, leaving the nation vulnerable to future crises when that oil could be needed desperately.
The Michigan Republican, chairman of the House Energy and Commerce Committee, also says that, instead of imperiling the safety net of reserved oil, the United States should focus on the expansion of energy projects to increase oil production in North America.
In an exclusive interview with Newsmax.TV, Upton, who was first elected in 1986, discussed the decision to release oil from the Strategic Petroleum Reserve.
“Let’s face it — it is a bad idea,” he declares.
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“I can remember the gas lines back in the 1970s," Upton says. "This [Reserve] was an effort by every administration — Republican and Democrat — to put oil away for when in fact there could be a blockade, there could be some major disruption of oil, so the U.S. could continue to function with the safety net of oil in the tank.
“Using it to offset prices takes that emergency blanket away from us.
“A million barrels a day is what they’re going to do to tap this resource. At the same time, we’ve got a number of pieces of legislation or even administrative actions that this administration can take that, in fact, would allow at least that much oil, if not more, to come from drilling off the coast of Alaska, to build a pipeline down from Canada, which means hundreds of thousands of jobs, or increase our production in the Gulf.
“The price of oil has actually gone down over the last couple of weeks. This is not the right signal to send now. It takes away that reserve that we might at some point need down the road.”
The Obama administration has argued that the release of oil is needed to offset the disruption in the oil supply caused by the unrest in Libya.
Upton comments: “The unrest in Libya started last March. It’s almost July. If this was a tool they wanted to use to offset the big spike in gas prices we saw in April and May, it might have been a different story.
“This takes away from the potential down the road of having a reserve to offset a complete disruption from the Middle East.”
Asked whether this makes the country more vulnerable to an oil disruption, Upton responds: “Exactly right. The Strategic Petroleum Reserve was not set up to serve as a price indicator. It was set up for if we actually have a disruption like we had in the 1970s.”
He agrees that this could create a national security problem if the administration decides to extend the release beyond the 30 million barrels.
“The focus ought to be on the expansion of domestic resources,” he tells Newsmax.
“A third of our oil comes from the Gulf and already, because we’ve said no to more permits and plans over the last year, production has actually declined by more than 100,000 barrels a day from what was projected just last fall. That’s not the approach we should be taking.
“We need a policy that begins to send a message to the speculators on Wall Street that we’re going to be serious about domestic production. Why is it that the United States gave Brazil $2 billion to develop their oil resources and yet we’ve said no here? Why is it that we’re not working with Canada, which will be producing more than three or four million barrels a day from oil sand, and we’ve stalled on the application to build a pipeline?
“If we continue to say we may not be interested, Canada is going to turn around and build that pipeline not to the United States but instead to Vancouver, and they’re going to be selling it off to the Chinese.”
Upton adds that bills in the works regarding energy policy could prove useful.
“The bill that we passed out of the Energy and Commerce Committee this week, which would get a decision on this Canadian pipeline, passed with pretty good bipartisan support and that bill is expected on the House floor as early as next month.
“So there are some pretty good prospects I think for trying to increase domestic supply, at least North American supply when you include Canada, which will offset some of the Middle Eastern oil that we continue to import.”
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