Though the Bush administration has bemoaned tight oil supplies and high crude prices, don't expect it to tap the nation's emergency oil stockpile anytime soon to give the market or consumers relief.
The White House has refused to turn on the spigots of the U.S. Strategic Petroleum Reserve to lower oil prices, out of concerns about meddling with the free market.
Administration officials have said repeatedly the reserve exists for big supply disruptions like those caused by hurricanes that plowed into the Gulf of Mexico in 2005.
The role of the emergency stockpile is to deal with an interruption of supply and not to try to manage prices, Vice President Dick Cheney said on Friday in an interview on CNBC.
However, federal law gives the White House some leeway in using the reserve to lower petroleum prices.
The Energy Policy and Conservation Act that governs the stockpile says the president can order a drawdown of the reserve to counter a severe energy supply interruption.
The law lays out three conditions for tapping the reserve: a long-lasting supply reduction, a severe increase in petroleum product prices and a likely major adverse impact on the U.S. economy from those high energy prices.
The price for U.S. crude oil hit a record $92.22 a barrel on Friday, due in part to worries about falling petroleum inventories and supplies this winter, when all heating fuels are forecast to cost more than they did last winter.
U.S. gasoline inventories are down some 15 million barrels from a year ago; heating oil stocks are down 16 million barrels; and crude oil is down 20 million barrels. While those inventories are within their five-year averages, demand is up.
Even though a steady decline in inventories has tightened supplies and boosted prices, that still does not warrant using the reserve, said Energy Department spokeswoman Megan Barnett.
I don't think there's much to this gray area (on when to tap the SPR) as far as this administration stands, she said.
Cheney said the U.S. economy has been amazingly resilient to high oil prices. So I'm not here today to forecast that we're going to have an oil-driven recession.
While there's no recession, higher energy costs cut into consumer spending, the main driving force of the U.S. economy.
The reserve was the U.S. government's response to the 1973-74 Arab oil embargo. Congress approved creating a 90-day emergency supply of oil.
The stockpile now holds 694 million barrels of crude at four underground storage sites in Louisiana and Texas, equal to about 57 days of total U.S. petroleum imports.
Putting SPR oil on the market would lower prices, but only in the short-term, said Tancred Lidderdale, an analyst with the U.S. Energy Information Administration.
If you increase the supply of oil that tends to lower prices in the market, Lidderdale said. But it goes against the policy of the SPR. It's to respond to emergencies.
Lidderdale also cautioned that tapping the SPR to lower prices could backfire if OPEC responds by cutting back its oil exports. So if we produce (more oil supply) does that mean they produce even less, he said.
So far, big U.S. refiners are not screaming for extra oil, and some executives are opposed to tapping the reserve now.
We're able to run our refineries right now fine with supplies that are on the market, said ConocoPhillips senior vice president Sigmund Cornelius. Using the reserve to lower prices would be counter to the intent that the SPR was put in place, he said.
Shell Oil Co. President John Hofmeister said the SPR was like a savings account for use in emergencies.
The nature of the strategic reserve is long-term security of supply and we'd be opposed to the idea of trying to use (it) to play the oil market, he said.