Oil Reserves Tapped

Thursday, June 23, 2011 - 2:25pm

President Obama dips into the country's oil reserve to help lower the price of gas.

Oil prices were down sharply today after President Obama ordered the release of 30 million barrels of oil from the nation's strategic petroleum reserve.

The International Energy Agency is releasing another 30 million barrels in an effort to replace some of the oil production lost because of the turmoil in Libya.

The move promises to lower prices a bit for the summer driving season but critics aren't satisfied.

The United States and the International Energy Agency are dipping into their their emergency oil reserves, selling 30 million barrels of oil each in an effort to bring down prices. The release is the biggest ever for the United States and Democrats were quick to defend President Obama's decision.

Rep. Ed Markey says "SPR stands for Strategic Petroleum Reserve, but it also stands for sudden price reduction."

Republicans accuse the president of playing pump politics.

Rep. Kevin McCarthy / (R) California / Majority Whip

The U.S. strategic reserve was tapped during the 1991 Gulf War and again back in 2005 after Hurricane Katrina. This time the upheaval in Libya has sapped 140 million barrels of oil from the world markets. Pump prices have fallen in the last two months but they're still 91-cents higher than a year ago. The oil industry says it's a production problem and the president missed the mark.

Jack Gerard, CEO of the American Petroleum Institute, says "he's overlooked the low-hanging fruit and that is producing American energy, by Americans for Americans."

Consumer advocates say the tapping the oil reserves will help but not for long.

Tyson Slocum of Public Citizen says "unless we see some complementary reforms addressing the role of speculators in the futures market, for example, we're not going to see a long-term impact from price reduction from this release of strategic petroleum supplies."

The International Energy Agency says it will review oil prices in a month and take more action, if necessary.

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