Sen. Salazar calls for release of reserve oil
He says some experts believe it could cut prices
By Gargi Chakrabarty, Rocky Mountain News (Contact)
Published August 7, 2008 at 4:21 a.m.
Ken Salazar says a release of oil "will knock down prices."
Sen. Ken Salazar, D-Colo., on Wednesday urged President Bush to release 70 million barrels of oil from stockpiles to rein in galloping pump prices, echoing calls made Monday by Democratic presidential candidate Barack Obama.
Salazar said the emergency release would boost domestic supplies and that the result would be evident at the pumps in 13 days.
“It will knock down prices, but the amount is unknown . . . I don’t know what impact it would have on current prices,” he said at an event near a ConocoPhillips station in Denver.
Salazar said some experts believe the additional supply could pull down oil prices by $20 a barrel. Although Bush released oil from stockpiles in 2005 after Hurricane Katrina wreaked havoc on energy prices, Salazar said he was not sure if Bush would do it today.
“Such a small release of oil would have a negligible impact on the world oil market,” said Greg Schnacke, president and CEO of Americans for American Energy, which lobbies for the oil and gas industry.
“It is a feel-good response but not necessarily a responsible response — the (emergency release) wouldn’t go very far.”
The U.S. consumes about 20 million to 21 million barrels of oil per day.
Oil on Wednesday closed at $118.58 a barrel on the New York Mercantile Exchange, a drop of $30, or 20 percent, from its high of $147.27 on July 11, as high energy prices eat into demand.
In the short run, Salazar said conservation and legislation against speculation would help calm runaway energy prices. But a comprehensive energy policy that encourages investment in renewable sources such as solar, wind or geothermal energy, or that pushes cellulosic ethanol toward commercial use, would help in the long run, he said.
Salazar said he supports extending a moratorium on leasing public lands for oil shale, saying the technology has yet to mature —a position, the industry argues, that would delay development of alternative sources of oil.
Salazar also warned that if lawmakers don’t stop bickering and craft an energy policy, pump prices could hit $5 to $7 a gallon. He said he is working with a group of senators from both parties, nicknamed the Gang of 10, to break the energy gridlock in Washington, D.C
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