By Christi Parsons and Neela Banerjee, Tribune Washington Bureau –
WASHINGTON — President Barack Obama launched a fiery defense of his energy policy Thursday amid growing pressure to stem rising gas prices, perhaps by releasing oil from the nation’s emergency petroleum reserve.
Obama avoided mentioning the Strategic Petroleum Reserve option, but he acknowledged the pain Americans feel at the pump and mocked Republicans for “acting like we’ve got a magic wand and we will give you cheap gas forever.”
“We’ve seen it all before. We know better; you know better,” he told a crowd at Prince George’s Community College in Maryland. “There is no such thing as a quick fix when it comes to high gas prices. There’s no silver bullet. Anybody who tells you otherwise isn’t really looking for a solution — they’re trying to ride the political wave of the moment.”
If history is any guide, tapping the reserve would provide only a short reprieve from rising gas prices. But such a move, which came up in discussions this week with British Prime Minister David Cameron, could underscore Obama’s concerns about the prospect of $5-a-gallon gas as he runs for re-election.
The White House denied news reports that the U.S. and Britain had worked out a deal to release fuel from their stockpiles but confirmed the idea came up.
“As part of a broad discussion of energy issues, including oil prices, the deployment of reserves was raised,” an Obama administration official said late Thursday. “But no specific plans or agreements were made.”
But even the brief idea that they had a deal dampened oil prices for a time.
Benchmark Brent crude oil in Britain and West Texas Intermediate in the U.S. each fell about $2 a barrel during trading, but they made up most of those losses once officials said no decision had been made.
Politics aside, the economic argument for tapping reserves may be strong but not overwhelming. Higher oil prices have pinched American businesses and households, but so far prices haven’t climbed high enough or rapidly enough to sap confidence or jolt the economy, as happened a year ago.
Recent economic data suggest the recovery is gaining momentum. Job growth was strong in the first two months of this year, and retail sales were solid in February — although that partly reflected the warm winter and increased spending on gas.
Economists at Moody’s Analytics estimate that American households are likely to spend about $75 billion more this year on gas than last year. That will eat up roughly half of the money Americans will get from the extension of the payroll tax cut this year.
Cameron and Obama met this week to discuss a range of topics, including energy policy. Aides wouldn’t say officially what was discussed, but a Reuters report attributed news of an agreement on releasing reserves to an unidentified British official.
Speaking to students at New York University on Thursday, Cameron said the two leaders didn’t come to any decision but added that releasing oil reserves is “something worth looking at.”
“Short term, should we look at the reserves?” Cameron asked. “Yes, we should.”
Shortly after White House press secretary Jay Carney said reports of “some sort of agreement” were inaccurate, oil prices began to recover.
The Strategic Petroleum Reserve in the United States is the world’s biggest emergency stockpile of crude oil. The reserve currently holds a little less than 700 million barrels of oil but it can hold up to 727 million barrels in four underground salt domes along the Texas and Louisiana coast.
Created by Congress in the early 1970s in the wake of the Arab oil embargo to deal with supply disruptions, the reserve has occasionally been tapped by presidents in a bid to tamp down rising prices, with mixed results.
Releasing the oil typically has only a brief impact on gasoline prices, and the administration has been arguing for weeks that Congress should adopt an “all of the above” approach to deal with volatile gas prices.
The U.S. should tap domestic sources of oil but also invest in alternative forms of energy, Obama said on Thursday. Republican candidates for