President George W. Bush will not tap the U.S. Strategic Petroleum Reserve to ease oil prices that hit a record high of $100 a barrel on Wednesday, the White House said.
"This president will not use the SPR to manipulate (oil prices)," White House spokeswoman Dana Perino said. "Doing a temporary release of the SPR is not going to change prices very much."
Perino said the Bush administration understood that high energy prices hurt family budgets and small businesses, but it believes that using the emergency oil stockpile to lower crude prices is not the solution.
"We have to figure out a way to increase supply here in the United States," she said. "The SPR is supposed to be used for emergencies. We know that markets work."
The stockpile was created by Congress in 1975 in response to the Arab oil embargo. The reserve now holds about 698 million barrels of crude at four underground storage sites in Texas and Louisiana.
The Energy Department said that, despite record high prices, it would not delay oil deliveries to the reserve and will carry out its plan to add 12.3 million barrels of crude to stockpile during the first half of this year.
The department said last autumn it would add the oil to the reserve beginning in late January at an average rate of about 70,000 barrels per day over six months.
"The modest royalty-in-kind SPR fill (less than one-tenth of 1 percent of daily world consumption) will continue as we announced," department spokeswoman Megan Barnett said.
The oil will come from companies that drill on federal offshore leases and turn over a portion of their crude to the government as royalties in lieu of cash payments.
Still, critics have said those oil supplies needed to stay in the market to help meet heating oil demand in the winter and gasoline demand in the spring.
Democratic Sen. Charles Schumer said Wednesday the Bush administration should suspend oil deliveries to the reserve so Americans will stop "losing access to oil in a tight market."
Senate Majority Leader Harry Reid said $100 oil was the product of Bush's "misguided" energy policy that put big oil company profits ahead of the economy and national security.
Barnett said the high oil prices reflected strong and growing global energy demand and insufficient investment in new production.
"The world is currently experiencing a tight supply-and-demand environment, where demand for oil is outstripping its supply," she said.
Meanwhile, a coalition of heating oil suppliers in the Northeast blamed speculators for pushing oil to $100 a barrel and called on Congress to rein in the abusive trading.
"We're paying $100 a barrel for oil now so Wall Street traders can take home billions in bonus payments," Shane Sweet of the New England Fuel Institute said. "Wall Street greed is pushing the American family and our small businesses to the breaking point," he added.
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