NY pols urge use of U.S. reserve oil
The spike in oil prices to a two-year high has led to calls for tapping into the nation's strategic reserves.
U.S. Sen. Kirsten Gillibrand and Rep. Steve Israel, both New York Democrats, have urged this week that President Barack Obama release some of the 727 million barrels of crude oil stored in salt caverns in Texas and Louisiana.
Crude oil futures closed at $104.42 a barrel on Friday, a 29-month high. On Long Island, heating oil averaged $3.94 a gallon on Monday, the state said, up 13 cents from a week earlier.
Israel, of Dix Hills, said in a statement, "Over the long term, we need the United States to transition off foreign oil. And for the short term, we need to provide relief and prevent unmanageable gas prices that hurt families and slow economic growth."
The reserve was created after the 1973-1974 Arab oil embargo. President George W. Bush declined to tap it in 2008, as he had in 2005. It was tapped in 2000 by President Bill Clinton and in 1991 by George H.W. Bush.
The U.S. Department of Energy website says the reserve legally can be tapped to alleviate a "severe energy supply interruption" that the president deems "is, or is likely to be, of significant scope and duration, and of an emergency nature" that it "may cause major adverse impact on national safety or the national economy."
Dan Dicker, a veteran New York oil trader and author of a book on volatile oil prices, says the current situation doesn't qualify because it results mostly from fears of shortages not an actual shortage.
"There is anything but a supply problem in oil right now," he said.
But Israel said Friday, "Whether it's a fear factor or a specific economic reality is irrelevant to somebody paying $3.68 a gallon for gas."
Asked by reporters Wednesday about tapping the reserve, Obama press secretary Jay Carney said, "I'm not going to get into an analysis of the individual options that are being looked at, except to say that we are monitoring the situation closely and evaluating the options that we have."