Bush Orders U.S. Emergency Oil Stockpile Restored to Capacity

President Bush on Tuesday ordered the government to fill up the nation’s emergency stockpile of oil, taking advantage of low prices to provide the nation with greater long-term energy security.

Energy Secretary Spencer Abraham said potential terrorism and the military campaign in Afghanistan were not key factors in Bush’s decision.

Rather, Abraham told reporters at the White House, the stockpile is substantially lower than it was eight years ago and the administration simply wants to restore the Strategic Petroleum Reserve to capacity as a precaution.

“There’s not any linkage to any kind of specific disruption threat, but we think it’s a wise policy,” he said.

Bush’s directive came a day before a scheduled meeting in Vienna of the Organization of Petroleum Exporting Countries to discuss cutting production to help bolster sagging oil prices.

“The Strategic Petroleum Reserve is an important element of our nation’s energy security,” Bush said in a statement. He ordered the reserve to be filled “in a deliberate and cost-effective manner,” largely with oil to be provided by oil companies in lieu of royalty payments to the government for drilling on federal land.

Amid a worldwide economic downturn, oil prices reached a two-year low earlier this month as demand fell by about 750,000 barrels a day in the third quarter. That brought demand down to 75.7 million barrels a day, according to the International Energy Agency in Paris.

Bush’s action was hailed by members of Congress from oil-producing states.

“Filling the Strategic Petroleum Reserve will provide America with a vitally important ‘rainy day’ reserve of crude oil in the event of future supply disruptions,” said Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Energy and Commerce Committee. “It is important for our economy and it is important from a national security standpoint.”

Rep. Joe Barton (R-Texas), chairman of a House energy and power subcommittee, said Bush’s move is particularly important because of the prospect that the war against terrorism could disrupt U.S. relations with some Middle East countries.

The reserve, Barton said, is “the most significant asset we have against severe supply disruption, which is a real possibility.”

Bush has sought to make reducing U.S. dependence on foreign oil a centerpiece of his administration. The GOP-controlled House endorsed many of his energy initiatives, including drilling in the Arctic National Wildlife Refuge.

But the administration’s energy bill stalled in the Democratic-controlled Senate, first because of partisan differences, more recently because the chamber has been preoccupied with anti-terrorism legislation.

Congress created the reserve--held in a string of salt caverns along coastal Texas and Louisiana near the Gulf of Mexico--in 1975 as a response to the 1973 OPEC oil embargo, which caused widespread economic hardship among Western nations.

The reserve currently holds about 544 million barrels of oil but has a capacity of 700 million barrels.

According to the Energy Department, U.S. petroleum consumption in 2000 was 19.4 million barrels a day.

Bush said: “Our current oil inventories and those of our allies who hold strategic stocks are sufficient to meet any potential near-term disruption in supplies. Filling the [reserve] up to capacity will strengthen the long-term energy security of the United States.”

The reserve was last tapped in September 2000, when President Clinton released 30 million barrels to help moderate gasoline prices that then had reached more than $2 a gallon in some parts of the country.

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Times staff writer Richard Simon contributed to this report.