Buried oil reserve a big gun in US war arsenal
www.smh.com.au By Michael Dobbs February 22 2003
Enough oil is stored in the deep salt caverns along the Gulf of Mexico for the United States to replace a year's worth of its imports from Saudi Arabia.
Originally conceived as a response to the oil crises of the 1970s, the Strategic Petroleum Reserve has become as much a part of the US's strategic arsenal as the aircraft carriers, airborne divisions and spy planes converging on the Persian Gulf.
According to the Department of Energy, the 599-million barrel reserve constitutes the US's "first line of defence" against disruptions in energy supplies.
As President George Bush prepares for war with Iraq, he has come under pressure to use the reserve to calm an increasingly jittery market.
In addition to the uncertainty caused by the Iraqi crisis, a general strike in Venezuela has helped push oil prices to new highs, and slashed inventories in many parts of the world.
If the past is a guide and Mr Bush follows the precedent set by his father in the Gulf War in 1991, he probably will resist the temptation to tap into the underground sites in Texas and Louisiana until the onset of any hostilities.
Once an attack on Iraq begins, he will order the release of some of the oil to signal the US's ability to ride out any temporary panic over the oil market.
If the war went badly, and Iraqi President Saddam Hussein succeeded in torching Iraqi oilfields or hitting oil facilities in neighbouring Kuwait or Saudi Arabia, the reserves would assume huge strategic importance.
The 50 or so caverns contain enough oil to replace 53 days of lost imports. In practice, officials say, supplies should last considerably longer, as the US buys much of its oil from Canada and Mexico, whose supplies would be unlikely to be interrupted by a crisis in the Middle East.
An economist at the American Petroleum Institute, Edward Porter, said that because of the tightness of the international oil market, the Strategic Petroleum Reserve might end up playing "a much more central role" in a war than it did in 1991.
Today, it is much more difficult to offset a likely loss of Middle Eastern oil, if the region became embroiled in war.
How much oil should be released from the reserve, and under what circumstances, is the subject of great debate among energy specialists.
Oil industry executives oppose releasing any, except in a national emergency.
The Bush Administration is keeping its options open. The Energy Secretary, Spencer Abraham, said last week that the reserve should be used only in the event of severe supply disruptions, and not to bring down prices.
The Washington Post