President Barack Obama should release crude from the Strategic Petroleum Reserve to stem rising gasoline prices, three U.S. House Democrats said, as the energy industry urged drivers to conserve to cut their bills.
“This most-recent run-up in prices is primarily the result of fear driving oil markets,” Representatives Ed Markey of Massachusetts, Peter Welch of Vermont and Rosa DeLauro of Connecticut said today in a letter to Obama. “We urge you to consider again deploying oil” in the reserve “to combat the rapid price escalations resulting from speculation in the oil markets.”
The American Petroleum Institute, the biggest U.S. lobbying group for the industry, said releasing oil from about 696 million barrels in the reserve might push prices lower for a short time, if at all.
“It drains reserves that could be needed in a real supply emergency,” John Felmy, chief economist of the Washington-based group, said today on a conference call with reporters.
Gasoline prices at the pump climbed for 15 straight days, reaching $3.579 a gallon yesterday, the highest since September, according to AAA.com. Obama plans to make energy the focus of speeches this week, while Republicans are citing rising gas prices to show the administration is against fossil fuels.
“We do strongly advocate that consumers can reduce their gasoline use,” Felmy said on a conference call with reporters. “Tune your engines, take the junk out of your truck, drive sensibly, all of those things.”
The oil industry urged Obama to approve TransCanada Corp.’s Keystone XL pipeline, saying the project would add 700,000 barrels a day to U.S. supplies and lower the nation’s dependence on imports from the Middle East.
The trade group, which represents more than 490 companies, including Irving, Texas-based Exxon Mobil Corp. and London-based BP Plc, said gasoline costs are rising as demand for crude increases in China and India, and on concerns that political unrest in Africa and the Middle East will disrupt shipments.
China’s National Bureau of Statistics today reported energy use rose at the fastest pace in four years in 2011 and efficiency improved.
Former House Speaker Newt Gingrich, a Republican candidate for president, said he would approve Keystone “the very first day” in office and open federal waters “so that we can develop the maximum amount of American oil and gas right here at home,” according to a transcript of a 30-minute message posted on his website.
The U.S. trade group praised the Obama administration’s agreement with Mexico reached on Feb. 20 that will open about 1.5 million acres of the Gulf of Mexico to energy development.
While developing additional oil fields will take years, markets are likely to react to the administration’s dedication to increasing supplies, Felmy said.
“Making a significant signal that you’re serious about moving forward with additional supplies can really have an impact,” he said during the press call from Washington.
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