Reuters reported this week that the White House was considering releasing oil from the United States' Strategic Petroleum Reserve if gasoline prices do not fall after September 3rd. in order to provide some relief at the gas pump just two months before the November 6th election.
Oil prices have risen sharply in recent weeks, rising 30 cents to $3.71 per gallon, according to AAA's Daily Fuel Gauge Report.
The Strategic Petroleum Reserve is the Department of Energy's emergency fuel storage of oil, along the U.S. Gulf coast, with a capacity of 727 million barrels of oil. According to Bloomberg Business Week, the reserve "currently has 696 million barrels of crude, the equivalent of 80 days worth of oil imports."
The Department of Energy (DOE) states on its website, "The Strategic Petroleum Reserve exists, first and foremost, as an emergency response tool the President can use should the United States be confronted with an economically-threatening disruption in oil supplies."
According to the DOE, a Presidentially-directed release has occurred three times under these conditions. First, in 1991, at the beginning of Operation Desert Storm, the United States joined its allies in assuring the adequacy of global oil supplies when war broke out in the Persian Gulf. The second was in September 2005 after Hurricane Katrina devastated the oil production, distribution, and refining industries in the Gulf regions of Louisiana and Mississippi. The third was announced on June 23, 2011 for 30 million barrels of petroleum to be released to offset the disruption in global oil supplies caused by unrest in Libya and other countries.
A 2011 Congressional Research Service report noted that while the reserve has traditionally been tied to a shortage of oil supplies, "price was deliberately kept out of the president's . . . drawdown authority because of concerns about what price level would trigger a drawdown, and that any hint of a price threshold could influence private sector and industry inventory practices."