U.S. Has No Plans to Tap Into Oil Reserve Yet

WASHINGTON – The Venezuelan oil crisis is over, but it may be two to three months before oil shipments to the United States return to normal levels, Energy Secretary Spencer Abraham said Tuesday.

In the meantime, the United States has no plans to tap the Strategic Petroleum Reserve, currently at 86 percent capacity, unless there are "severe disruptions" in supply.

"We will and we can act quickly to use the Strategic Petroleum Reserve ... to offset any severe disruptions if it's needed," Abraham told the Senate Energy and Natural Resources Committee.

He added that the United States would act to add oil to the market from reserves only after consultations with other oil-consuming countries that have stocked emergency oil supplies.

Energy prices across the board — including natural gas, gasoline, crude oil and heating oil prices — have all gone up in recent weeks, and have doubled in some parts of the country.

The energy secretary, however, maintained the long-held line by the administration, that the reserve is not a means to fix prices, but an emergency supply that can only be used in severe shortages.

The strategic reserve, located in salt caverns along the Texas-Louisiana Gulf coast, can hold 700 million barrels. It currently has 600 million barrels. President Bush ordered it to be filled after Sept. 11, but the Energy Department suspended deliveries for the first three months of 2003.

Lawmakers said they are torn over whether to dip into the reserve or whether to keep filling it when prices are high and private inventory is low. The president is the only one with the authority to tap into the reserves.

"People are being pinched like never before" by soaring gasoline and other energy prices," Sen. Ron Wyden, D-Ore., told Abraham, adding that consumers "are getting hosed becuase they're not getting any protection."

But Abraham said the government oil stocks were established "to provide energy security ... We do not believe it should be used to address price flucutations."

He added that making available 2 million barrels of heating oil for the high-consuming northeast -- as demanded by a group of New England heating oil companies -- would not put a real dent in prices and should not be used unless there is an actual cut-off of supplies.

The United States uses 20 million barrels of oil and refined products a day; a little over half of that comes from imports. U.S. light crude prices rose to $36.48 per barrel last week, a 90 cent per barrel increase.

Production from Venezuela had been shut down for 11 weeks by a strike in that country, compounding the shortage.  The strike has ended, but Abraham said that it could be 60 to 90 days before Venezuelan imports are back to normal levels.

"It's my understanding that the crisis that has essentially shut down production (in Venezuela) has passed," Abraham said.

The Associated Press contributed to this report.