The Obama administration isn't getting any more popular with Oklahoma's oil and natural gas industry, despite the announcement Thursday of plans to sell 30 million barrels of oil from the country's emergency reserves.
Mike Cantrell, president of the Oklahoma-based Domestic Energy Producers Alliance, called the plan a “cruel game of ‘bait and switch'” meant to allow the administration to claim credit for gas prices that were falling already.
Cantrell said there is no reason to tap the country's strategic petroleum reserve.
“We call it ‘strategic' because the reserve is intended for national security emergencies,” he said. “The release of what amounts to 36 hours of oil into a market that is already correcting downward is merely a cynical attempt to take advantage of already falling gasoline prices when they have done nothing to affect that correction.
“The only real effect this action will have is to drain down our reserve and without even making a dent in the real price of gasoline.”
The International Energy Agency intends to release an additional 30 million barrels of oil.
Darryl Smette, Devon Energy Corp.'s executive vice president of marketing and midstream, said he doesn't expect the move to affect prices, despite a slight dip Thursday.
“Considering worldwide oil demand is 88 million barrels per day, we do not believe 60 million barrels from the strategic reserve will make a material difference in the market,” Smette said. “The market reaction we saw today was driven by optics and emotion.
“We do not believe this decision will have a sustained impact on supply-demand fundamentals or on prices.”
U.S. Sen. Jim Inhofe, R-Tulsa, said President Barack Obama's decision to tap into the petroleum reserve shows the importance of increasing domestic energy production.
“Contrary to what President Obama likes to claim, we have plenty of resources here at home. In fact, we have 163 billion barrels of recoverable oil — that's 5,400 times more oil than what Obama wants to release from the (strategic petroleum reserve).
“The biggest impediment to developing these resources is this administration.”
Others also reacted similarly.
Rep. Tom Cole, R-Moore, said, “This is a bad decision driven by political considerations rather than sound policy. The Strategic Petroleum Reserve should only be used in cases of national emergency — not as a gimmick to artificially reduce gas prices. If the president truly wants to bring fuel prices down, he should stop blocking American energy production at every turn.”
Rep. John Sullivan, R-Tulsa, said, “There is no reason whatsoever the president should need to tap into the SPR when we have a 125-year supply of American made natural gas sitting right under our feet. All we have to do is use it.”