Bush Won't Use Oil Stockpile Except for Emergency

abcnews.go.com March 5 — By Tom Doggett

WASHINGTON (Reuters) - The Bush administration will not use the nation's crude oil stockpile except for true energy emergencies and will not "beg" OPEC to produce more oil amid worries of a U.S. military strike against Iraq, U.S. Energy Secretary Spencer Abraham said on Wednesday.

Democrats and consumer groups have urged the administration to release crude oil from the Strategic Petroleum Reserve to help ease prices that recently brushed the $40 a barrel mark.

Speaking to House lawmakers on an appropriations subcommittee, Abraham blamed high oil prices on speculation about war with Iraq -- and possibly a disruption in supplies from the oil-rich Middle East -- as well as recent frigid East Coast weather and sharply reduced oil shipments from strike-torn Venezuela.

"We do not believe that that reserve's capacity should be employed to adjust prices. We believe that it really has to be maintained to deal with energy emergencies when there is simply not supply," Abraham said.

The reserve was created by Congress in the mid-1970s and currently holds 599 million barrels in several underground salt caverns in Texas and Louisiana. The U.S. government sold 17 million barrels of oil from the stockpile in January 1991 at the start of the U.S. military offense in the Gulf War.

Abraham also said the White House would not plead with the Organization of Petroleum Exporting Countries to supply more crude oil. "We're not going to beg for oil," he said.

Rep. John Peterson, a Republican from Pennsylvania, said the administration should develop a strategy to attack oil price spikes and that it should be normal business practice to ask friendly nations to supply more oil. "That's business, that's not begging," Peterson said.

U.S. crude oil supplies recently fell to the lowest level since 1975.

Senate Democrats earlier Wednesday released a report urging the White House to suspend all 2003 scheduled deliveries to the Strategic Petroleum Reserve as a way to keep more oil available on the market.

The recommendation was part of a 268-page report from the Democratic staff at the Senate Permanent Subcommittee on Investigations. The report capped a 21-month investigation into increased volatility of U.S. gasoline prices.