TCS Daily

Restore the Strategic Petroleum Reserve to its National Security Purpose

By Ken Adelman - May 21, 2001 12:00 AM

Americans couldn't have asked for a sharper reminder of the necessity of the Strategic Petroleum Reserve (SPR) than the one they got from the Mideast last week. It's a shame that the flippant politicians who insist on viewing the reserve as their personal piggy bank of cheap oil, to be depleted at their every whim, weren't paying particularly close attention.

No sooner had the Bush administration released an energy plan that notes the United States' rising dependency on foreign oil, than Arab states called for cutting all ties to Israel following Israeli F-16 strikes against Palestinian targets - the first such strikes since the 1967 Arab-Israeli war.

To be sure, the U.S. is not on the verge of getting dragged into warfare in the Mideast and Persian Gulf. But the region's tensions are a reminder of how easily conflict there can escalate - and how suddenly U.S. oil supply can get disrupted.

Because of that risk, the U.S. maintains the SPR. It was set up in 1975 following the 1973-74 Arab oil embargo - an event causing hardships that few American adults will soon forget. The thinking was that keeping a large reserve of crude - literally in 500 salt domes along the Gulf of Mexico coast - would discourage a repeat use of oil as a weapon. The reserve would serve to replace imports for 90 days, buying time for an oil crisis to sort itself out, while also reducing domestic harm and serving as a fuel reserve for national defense. We most recently saw it used to good effect in the 1991 Gulf War against major oil producer Iraq, when President George Bush Sr. ordered a drawdown that helped to dampen oil-price spikes.

Since then, the SPR has fallen to perilously low levels. As the Bush energy plan notes, the reserve now holds only 54 days of supply, down from 82 days'-worth in 1990. The nation is more vulnerable to oil blackmail now than it has been in years. Yet instead of rushing to replenish the national asset, some politicians have pushed to pillage it.

What's worse, they've succeeded, since 1996 raiding the reserve at least four times. Three raids for federal-budgetary purposes took place in that year. One of them had no other purpose than to reduce the spendthrift government's deficit. Then, remember the hullabaloo about home heating oil last fall? Responding to pressure from politicians in the Northeast led by Democrat Sen. Charles Schumer, Bill Clinton arranged the "swap" sale of 30 million barrels from the reserve.

The sale had no effect on heating-oil prices, as Vice President Dick Cheney reminded the nation on television just this past Sunday. In addition, it was mired in political shenanigans, with some of the contracts being initially awarded to companies without proper experience in the field.

Given the pattern of abuse in recent years, and the alarming shortage, the Bush administration is right to want to get the SPR back in order. It's particularly heartening that the Bush team in its new national energy policy stresses the SPR is "designed for addressing an imminent or actual disruption in oil supplies, and not for managing prices."

It should follow up with a bold plan to protect the reserve's essential character as a tool of national security that prevents blackmail and hardship. It must be protected from unnecessary depletion - and from some politicians' greedy, or at least thoughtless, instincts.

This doesn't mean the reserve has to be left completely intact and full at all times. Shortfalls resulting from oil spills have occasionally been corrected with small releases from the reserve. And there are circumstances in which the rapid refilling of the reserve would be undesirable. For instance, after the Iranian revolution in 1979, the reserve, still depleted from the oil shocks, was refilled in a step-by-step fashion, because too rapid a refilling would have driven up world oil prices causing more harm than good.

But abuses must be avoided. This year, about 52% of the United States' oil needs have been fed by foreign countries. A quarter of the imports were from the Mideast, another quarter from Central Asia and Africa.

As long as the U.S. remains dependent on such volatile parts of the world for its fuel, the administration must ensure average Americans and the U.S. military are protected from the whiplash of shortages, embargoes and other forms of oil blackmail. The national interest requires it.

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