'Top Off The Tanks,' Says Bush
"Fill it up" is the president's order for the Strategic Petroleum Reserve, reports CBS News White House Correspondent Mark Knoller. President Bush ordered the government Tuesday to boost its emergency stockpile of oil by millions of barrels to "strengthen the long-term energy security of the United States."
The Strategic Oil Reserve, which currently has 544 million barrels of oil, is to be filled "in a deliberate and cost-effective manner" up to its full capacity of 700 million barrels, Mr. Bush said in a statement.
Energy Secretary Spencer Abraham agrees there's no rush; it's just viewed as a prudent move.
"There's not any linkage to any kind of specific disruption threat," he told reporters, "but we think it's a wise policy in terms of the long term."
With oil prices declining, the Energy Department last month recommended funneling additional crude into the government's Strategic Petroleum Reserve, a string of salt caverns along the Gulf Coast at the Texas-Louisiana border. An additional 48 million barrels is expected to be put into the reserve by the end of next year under existing arrangements.
Under the president's order to Abraham, most — if not all — of the oil will be provided by oil companies in lieu of federal royalty payments.
Private economists have said the move, in addition to boosting emergency reserves, will signal U.S. intentions to help stabilize world oil prices at a time when OPEC producers — including Saudi Arabia — have been worried about the sharp drop in global demand.
Congress created the Strategic Petroleum Reserve in 1975 as a response to the 1973 OPEC oil embargo. The U.S. reserve as it stands now is enough to make up for the loss of 54 days of imports.
"Our current oil inventories, and those of our allies who hold strategic stocks, are sufficient to meet any potential near-term disruption in supplies," Mr. Bush said.
The move came a day before oil ministers from the Organization of Petroleum Exporting Countries were to meet in Vienna to grapple over possible production cuts and try to stem the slide of oil prices.
Robert Ebel, an oil expert at the Center for Strategic and International Studies, called it "prudent planning" for any future oil disruptions. "We've been lax in our attention to the Strategic Petroleum Reserve," said Ebel.
©MMI CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report