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Americas: Tapping US oil reserves no solution on prices: Senator Murkowski

https://www.chemnet.com   Mar 10,2011 Platts
Despite rising crude oil and gasoline prices and instability in oil producing states, the US should not tap the Strategic Petroleum Reserve, US Senator Lisa Murkowski, an Alaska Republican said Tuesday.

Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, said Democrats who want to open SPR to address rising gasoline prices have the wrong idea.

"The SPR is our nation's insurance policy against serious disruptions in oil supply," Murkowski said in a statement. "It is not a political lever to be pulled when rising prices at the gas pump demonstrate our lack of a coherent energy policy."

Meanwhile, New York Senator Chuck Schumer joined the ranks of Congressional Democrats calling for a sale from the SPR. Schumer said selling from the SPR, or even saying the US is willing to sell from the reserve, would help the economy.

"Even a commitment by the administration that it stands ready to tap the reserve could help calm jittery markets," Schumer said.

Yet the White House and other top Senate Democrats remained noncommittal about accessing the SPR. Spokesmen for Senate Majority Leader Harry Reid, a Nevada Democrat, and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, both said opening the SPR should remain an option if the Middle Eastern unrest worsens, but didn't call for the reserve to be opened now.

"If the current instability in the Middle East grows enough to pose an immediate threat to our energy and economic security, we must be prepared to tap that emergency supply," said Reid spokesman Jon Summers.

Political violence in Libya has halted its crude exports, market sources said Monday. According to the International Energy Agency, Libyan ports loaded 1.337 million b/d of crude in 2010.

The International Energy Agency in an update Friday estimated that "around 1 million b/d out of a prevailing 1.6 million b/d of crude production has been shuttered" in Libya.

On Monday, a number of Congressional Democrats, including Representatives Ed Markey of Massachusetts, Peter Welch of Vermont, and Rosa DeLauro of Connecticut, renewed their call for the US to sell a portion of the SPR to offset rising oil prices.

But Murkowski said opening the SPR would offer little, if any, relief to oil markets. Instead, she said, the US should ramp up domestic energy production to reduce future dependence on unstable nations.

"We should have been increasing domestic oil production 20 years ago and we have literally no more time to waste to begin that process today," Murkowski said.

Under the Energy Policy and Conservation Act, the US Secretary of Energy may tap the SPR only when there is energy supply shortage of "significant scope or duration," the disruption causes "a severe increase" in prices, and those increases will have a "major adverse impact" on the US economy.

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