News & Current Affairs

August 5, 2008

Obama urges opening oil reserves

Obama urges opening oil reserves

US presidential hopeful Barack Obama has outlined his plans to tackle the growing cost of energy and its impact on the American economy.

It is an issue that is expected to play a critical role in the presidential election in November.

In a reversal of policy, Mr Obama said the US should release 70m barrels of oil from its strategic reserves to lower petrol prices in the short-term.

He also suggested releasing more of the national petroleum reserve in Alaska.

Mr Obama reiterated a statement made at the weekend that he could support limited US offshore oil drilling if it were needed to enact a compromise energy policy.

In a similar reversal, his Republican rival, John McCain, has expressed his support for new offshore drilling, as part of an energy plan that includes nuclear energy and tax relief on gas production.

Mr Obama said US politicians have failed for three decades to deal with the energy crisis, and that Mr McCain has been “part of that failure.” In a new TV advert he accuses Mr McCain of being under the sway of big oil firms.

The ad shows Mr McCain with President George W Bush, as a narrator says: “After one president in the pocket of big oil, we can’t afford another.”

A spokesman for Republican Senator McCain said the advert was misleading.

The advert’s narrator says that “big oil’s filling John McCain’s campaign with $2m in contributions”.

The ad also promotes Mr Obama’s plan to use a windfall profits tax on big oil companies to give American families a $1,000 (£508) tax rebate, at a time when many are struggling with high energy prices.

‘Suffering’

In a statement, McCain campaign spokesman Tucker Bounds said the advert failed to mention that Mr Obama had voted in favour of a 2005 bill giving tax breaks to energy producers.

Mr McCain voted against the bill, which was supported by Mr Bush.

“Barack Obama’s latest negative attack ad shows his celebrity is matched only by his hypocrisy,” Mr Bounds said.

“Also not mentioned is the $400,000 from big oil contributors that Barack Obama has already pocketed in this election.”

Mr Obama said his proposal to sell 70 million barrels from the reserve could help in the short-term to drive down the price of petrol at the pump.

His call to release oil from the US strategic reserves represents a change from the energy policy he proposed in June, in which he advocated keeping the reserve intact in case of emergency.

Campaign spokeswoman Heather Zichal said Mr Obama had reconsidered.

“He recognises that Americans are suffering,” she said.

During a speech in Lansing, Michigan, Mr Obama said: “Breaking our oil addiction is one of the greatest challenges our generation will ever face.

“It will take nothing less than a complete transformation of our economy.”

Mr Obama proposed releasing light crude oil from the stockpile, to be replaced at a later date with heavy crude oil.

Light crude oil is easier to turn into fuel for vehicles and other petroleum products.

The Bush administration has opposed tapping the reserve, saying it should be kept for dire emergencies. In 2005, some 10 million barrels were released in the wake of Hurricane Katrina, after supplies to refineries were disrupted.

Mr Obama’s comments came two days after he confirmed he was broadly supportive of a plan for energy independence, which includes limited offshore drilling in the Gulf of Mexico.

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