CHICAGO — In a reversal, Barack Obama is proposing tapping the nation’s strategic oil reserves to help drive down gasoline prices, his campaign said today.
Obama supports releasing light oil from the emergency oil stockpile now and replacing it later with heavier crude more suited to the country’s long-term needs, according to a campaign fact sheet. Light crude oil is easier to refine into gasoline than heavier oil.
Also today, the Obama campaign unveiled a television ad that criticizes Republican John McCain’s energy policies.
“After one president in the pocket of big oil we can’t afford another,” says the ad, referring to President Bush’s previous work in the oil industry.
Obama is emphasizing energy and the economy in campaign stops this week in Michigan, Ohio and Indiana, beginning with a speech today in Lansing, Mich. Gas prices over $4 a gallon have become a top issue in the presidential contest.
In the past, Obama has not advocated tapping the oil reserve, but campaign spokeswoman Heather Zichal said he has reconsidered. “He recognizes that Americans are suffering,” she said.
The nation’s strategic petroleum reserve contains 707.2 million barrels in salt caverns in Texas and Louisiana. It was last tapped shortly after Hurricane Katrina. Otherwise, President Bush has refused to use the reserves, saying they need to be left intact as an emergency stockpile. However, in the face of strong congressional pressure, Bush in June stopped filling the reserve until oil prices decline.
Obama’s call for using the government reserve mirrors a proposal that has been pushed by congressional Democrats, but opposed by Republican leaders and the White House.
House Speaker Nancy Pelosi, D-Calif., for weeks has called for Bush to withdraw a “small amount” of oil from the government reserve to add to supplies and try to force down prices.
Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, has tried to get agreement on legislation that would require the release of 70 million barrels of oil from the government stockpile over six months with the oil to be returned at a later date.
The Strategic Petroleum Reserve is capable of releasing about 4 million barrels a day. It’s unclear what impact such release might have on global oil prices, or costs of gasoline at the pump. But a clear signal by the United States to use its emergency reserve to a significant extent could put downward pressure on oil markets at least for a time, energy experts say.
In 2000, President Clinton used a similar “swap” of government oil as proposed by Obama, making available 30 million barrels because of concern over rising prices and supply worries in advance of that year’s winter heating season. The move at the time was criticized by Republicans as an attempt to help then Vice President Al Gore’s presidential bid.
The new Obama ad trumpets his proposal to revive a windfall profits tax on energy companies and asserts that McCain favors tax breaks for the oil industry.
“A windfall profits tax on big oil to give families a thousand-dollar rebate,” an announcer in the ad says.
Obama has pushed for such a tax to fund $1,000 emergency rebate checks for consumers besieged by high energy costs.
Congress enacted a windfall profits tax in 1980, during an earlier era of high oil prices, but repealed it in 1988 amid concerns the tax was discouraging domestic oil development. Last year, the House approved $18 billion in new taxes on the largest oil companies, but they were blocked by Republicans in the Senate.
The new ad opens with a driver pumping gas. The announcer says, “Every time you fill your tank, the oil companies fill their pockets.”
Republicans were quick to pounce.
“Barack Obama’s latest attack ads shows his celebrity is matched only by his hypocrisy,” said McCain spokesman Tucker Bounds. “After all it was Senator Obama, not John McCain, who voted for the Bush-Cheney energy bill that was a sweetheart deal for oil companies. Also not mentioned is the $400,000 from big oil contributors that Barack Obama has already pocketed in this election.”
Obama said Friday that he would reluctantly consider accepting some new offshore oil drilling. Obama previously opposed any offshore drilling. He praised a plan unveiled by a group of Republican and Democratic senators to permit limited drilling off Southern states while supporting an effort to convert most vehicles to alternative fuels in 20 years.
McCain’s campaign accused the Democrat of flip-flopping. However, the Arizona Democrat only recently reversed his own former opposition to drilling on the Outer Continental Shelf.
Both candidates have energy proposals to reduce U.S. dependence on oil. Obama’s was first, and its centerpiece is a 10-year, $150 billion spending plan focusing on clean coal technology, further development of plug-in hybrid cars, commercialization of wind and solar power and other measures.
McCain’s, which is called the Lexington Project, includes building 45 new nuclear power plants; offering a $300 million prize for major advancement of low-cost, plug-in hybrid or electric car technology; and “encouraging the market” in wind, hydroelectric and solar power. Both he and Obama would cut use of fossil fuels to combat climate change.
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