Posted March 13, 2014
With SPR Test, Obama Administration Warms Up to Flex U.S. Energy Muscle
Reuters (analysis): A rare U.S. test of its strategic oil reserves may be just coincidentally timed with the most serious stand-off with Russia in decades, but the underlying message of the move announced on Wednesday left little doubt: Prepare for the rise of a new global energy superpower.
The Energy Department said it would offer up to 5 million barrels of sour crude from the Strategic Petroleum Reserve (SPR), with bids due in two days. Officials said the sale would ensure the reserves can still quickly deliver oil to refiners despite changing pipeline networks.
Plans for the sale had been in the works well before Russian forces invaded Crimea in Ukraine last week, according to administration officials. Several Washington analysts also said they had heard talk of the release some weeks ago.
The White House said the test sale was required by law as part of continual evaluations of the reserve, authorized by Congress after the 1973 Arab oil embargo sent U.S. gasoline prices soaring and American drivers to long lines at service stations. Yet the last such test occurred in 1990, months before the United States waded into the first Gulf War.
For many analysts, the subtext wasn't so much a warning shot to Russia, which produces more than 10 million barrels every day. It was the Obama administration's desire to expand the SPR from an emergency buffer against severe disruptions to U.S. oil imports into a more flexible lever it can use to aid the economy and, ultimately, to influence foreign policy.
Read more: http://reut.rs/1hfXooo
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ABOUT THE AUTHOR
Mary Schaper is a Digital Communications Manager for the American Petroleum Institute. She previously worked on Capitol Hill for the Senate Energy and Natural Resources Committee as Digital Director and for Senator Lisa Murkowski. Before coming to D.C., she spearheaded digital strategy for Murkowski's successful Senate write-in campaign in 2010. Schaper enjoys traveling and taking in the local culture alongside her husband, their son and loyal springer spaniel.