HOUSTON -- A former top OPEC executive said on Monday that President Obama should tap into the Strategic Petroleum Reserve.
“It will be a wise decision because it supplements the decision of the Saudis to put into the market almost the entire amount of [oil from] Libya,” said Rene Ortiz, who was inspector general of the Organization of Petroleum Exporting Countries from 1979 to 1981.
His comments came after the opening dinner of the 30th annual Cambridge Energy Research Associates conference, hosted by IHS CERA Chairman Daniel Yergin.
Ortiz’s comments put him at odds with Yergin and aligned with Democratic lawmakers like Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., who have been calling on Obama to tap into the SPR amid continued Middle East unrest. The reserve stockpile is at capacity with 727 million barrels of oil.
Yergin told National Journal Daily on Friday that Obama should not release any oil from the SPR because there is no actual shortage of oil. “The market is responding to fear,” Yergin said Friday.
Ortiz acknowledged that on Monday but said it was a smart decision to tap into the SPR for larger geopolitical and market reasons.
Obama should tap into the SPR “not necessarily to overcome any supply disruption for the moment,” Ortiz said, “but just to prove that the U.S. can also be part of this world alliance that is protecting the reactivation of the world economy because everyone is concerned about that. Higher [oil] prices would kill that.”
He added that OPEC itself would not do anything in response to Obama tapping into the SPR, but individual countries would react positively.
OPEC includes 12 countries, mostly in the Middle East and North Africa, including Libya, Saudi Arabia, Kuwait, and Iraq. The organization provides nearly 40 percent of the world’s oil.
As oil prices keep rising, calls to tap into the SPR are increasing.
“Yes, I think we need to tap it,” former Energy Secretary Bill Richardson told CNN’s Wolf Blitzer on Monday. “We need to tap it to protect the home heating oil prices and situation in the Northeast.”
White House spokesman Jay Carney on Monday reiterated comments by Obama’s chief of staff, William Daley, on Sunday that tapping into the SPR is an option the administration is considering. Mindful of the politics around gas prices, Carney also tried to reassure Americans that the administration is making sure the cost of filling up doesn't get too high.
“I wouldn't look to a price threshold. The issue here is disruption, is there a major disruption in the flow of oil. That's obviously a factor,” Carney said.
“But I think the point that we want to make is that we're very cognizant of the fact that Americans are experiencing a sharp rise in prices at the gas pump, and that affects them and their family budgets,” Carney continued. “And we are monitoring that very closely.”
He also said the White House is “in discussions with oil-producing countries” and the International Energy Agency “about the various options that are available in the global system to deal with a major disruption, should that occur.”