Oil Reserves

The Senate approved an $8-billion appropriations bill that includes a Reagan Administration-backed proposal to sell the Naval Petroleum Reserves. The Senate voted for the proposal to sell the oil reserves at Elk Hills, Calif., on the grounds the sale eventually would net the government at least $2.4 billion.

California's Monterey shale, which holds an estimated 15 billion barrels of oil, has been touted as crucial to the state's energy future and a boon to its economy. A study released Thursday tries to quantify the potential economic benefits. The study by USC and the Communications Institute, a Los Angeles think tank, estimates that development of the 1,750-square-mile formation in central California could generate half a million new jobs by 2015 and 2.8 million by 2020. Tapping the Monterey shale, which  holds an estimated two-thirds of the country's shale oil reserves, would probably require some combination of horizontal drilling and hydraulic fracturing, known as fracking, a practice opposed by many environmentalists worried about possible damage to land and water.

Re "Use the Oil Reserve as a Lever," editorial, March 7: It makes as much sense to spend oil reserves, which are set aside for national emergencies, to drive down gasoline prices as it does to spend savings set aside for a child's education to drive down the cost of clothing. A better way would be to leave the reserves/savings where they are and quit buying. W. DAVID BAIRD Malibu If you want to drop the price of a gallon of gasoline immediately, write an editorial urging the administrations of President Clinton and Gov. Gray Davis to send legislation to our legislative branches suspending the federal and state taxes on a gallon of gasoline.

The National Petroleum Reserve-Alaska just isn't what it used to be - or rather, what we thought it was. Until about two years ago, the 23-million-acre spread of land was thought to hold a treasure-trove of 10.6 billion barrels of black gold. Then research by the U.S. Geological Survey brought the figure way down, to less than a tenth of that amount. Yet the reserve is rich in other features, among them wildlife and the fragile ecosystems in which it lives. Interior Secretary Ken Salazar wisely recognized both kinds of resources in drafting the first comprehensive plan for the reserve.

Only gasoline prices nearing $4 a gallon could accomplish this political feat: bringing together congressional Democrats and Republicans to support a halt to oil deliveries for the nation's Strategic Petroleum Reserve. With fuel costs becoming a crucial election-year issue, members of both parties -- separately -- pitched their ideas Wednesday for bringing down prices.

The Strategic Petroleum Reserve, established in 1975 to avoid a repetition of the the 1973-74 oil crisis, has become a focus of attention since the Iraqi invasion of Kuwait. At the moment, the United States has 580 million barrels of oil in storage. President Bush has ordered the sale of 5 million barrels of crude to test how the sale and distribution system would work in the event of an emergency oil shortage.

U.S. proved crude oil reserves last year rose for the first time in three years and natural gas reserves had their biggest annual increase since 1970, the government's top energy forecasting agency said Tuesday. Crude oil reserves jumped 1.8% in 2005 from the year before to 21.76 billion barrels and natural gas reserves soared 6.2% to 204.4 trillion cubic feet, according to the federal Energy Information Administration.

Four offshore oil exploration areas owned jointly by Brazilian state-run oil company Petroleo Brasileiro, Royal Dutch/Shell Group and Exxon Mobil Corp. are commercially viable, Shell's Brazilian unit said in a statement. The areas are within an offshore block 74 miles off the coast of Brazil's southeastern state of Espirito Santo. Shell and Petrobras each have a 35% stake in the block, and Exxon Mobil has 30%.

The United States will use its nearly 600-million-barrel petroleum reserve to stabilize oil prices in the event of war in the Persian Gulf, a U.S. Embassy official said today. The official, who spoke on condition of anonymity, commented after U.S. Energy Secretary James Watkins met Sunday with his Saudi Arabian counterpart, Hisham Nazer. Watkins arrived Saturday for talks on the oil market situation in light of Iraq's four-month-old occupation of Kuwait.

The world's oil companies were already double-checking their books before Royal Dutch/Shell Group sent the industry into a tizzy this month by reducing the stated amounts of its proven reserves by almost 4 billion barrels of oil and natural gas. That's 20% of its total. The stock market's reaction was swift. In the week that followed, the shares of Netherlands-based Royal Dutch Petroleum Co.

As rising gasoline prices threaten to put a drag on the already sluggish economic recovery, the Obama administration is leaving open the possibility that it could draw from the nation's emergency reserve in an attempt to reverse the trajectory. "There's a case for the use of the reserve in some circumstances, and we'll continue to look at those and evaluate that carefully," Treasury Secretary Timothy F. Geithner told CNBC on Friday. The secretary's hedged remarks echoed those coming from the White House all week, as gas prices surged amid market jitters over Iran's nuclear program.

A surprise move to tap government oil reserves could slash painfully high gasoline prices this summer and give the U.S. economy a much-needed boost, but the rare action underscores the challenge posed by the weakening recovery. The price of oil tumbled Thursday after the U.S. and other industrialized countries, citing the loss of oil from Libya, said they would release 60 million barrels of crude from emergency stockpiles and sell it on the energy markets over the next 30 days. Half of the oil is to come from the U.S. government's Strategic Petroleum Reserve on the Gulf Coast.

WASHINGTON -- The Obama administration announced Thursday that it planned to release 30 million barrels of oil from the Strategic Petroleum Reserve, as part of a coordinated international effort to drive down high crude prices and revive the flagging economic recovery in the world's most industrialized countries. The decision sparked a plunge in crude oil prices in the U.S. and Europe. Oil futures were down $4.02 to $91.39 a barrel at about 10:45 a.m. PDT. The price was down as much as $5.72 a barrel in earlier trading on the New York Mercantile Exchange.

Fears of another civil war are playing out in Sudan as troops led by President Omar Hassan Ahmed Bashir have overrun towns and attacked tribesmen loyal to the south around a contested border region of oil reserves and well-armed militias. Bloodshed and streams of refugees are a dangerous prelude to July 9, when southern Sudan, after decades of conflict that left more than 2 million dead, gains independence. The south will inherit the bulk of the nation's oil supplies and the incursions by northern forces appear to be part of Bashir's strategy to press the south for last-minute concessions.

WASHINGTON -- President Obama's news conference Friday was intended to reassure Americans about rising gas prices. But the disaster in Japan upset that agenda before it ever got going. And in time, it could also affect the Republican energy strategy on Capitol Hill. Obama pressed ahead with his prepared topic, saying that he was "confident about our ability" to fill in any potential gaps in the nation's fuel supply as a result of the instability in the Middle East, even as gas jumped to about $3.50 a gallon.

Whenever gasoline prices spike, it's a pretty good bet that politicians are going to propose tapping the Strategic Petroleum Reserve. This time around, the talk started with Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, who last week urged President Obama to consider selling oil from the reserve as a way to stabilize prices. Then on Sunday, White House Chief of Staff William Daley said on NBC's "Meet the Press" that the Obama administration is "considering" dipping into the reserve.

The Bush administration Friday awarded contracts to ChevronTexaco Corp. and Royal Dutch/Shell Group's Shell Oil to replenish the U.S. emergency petroleum reserve, despite record high crude prices and strong oil demand. Oil prices hit record highs Friday, climbing close to $45 before settling back down, after a renewed threat to Russian oil major Yukos added to the strain on world supplies. The price of crude for September delivery ended in New York at $43.

Exploratory oil wells drilled off Brazil's coastline indicate the presence of a vast pool of crude that could propel this nation into the top tier of world energy producers. The oil field highlighted last week by state-controlled oil company Petrobras lies in "ultra-deep" waters beneath an unstable layer of hot salt, presenting technological challenges that are sure to be ultra-high cost.

With the politics of energy shifting as rapidly as gasoline prices, Democrats, led by presidential candidate Barack Obama, are retreating from long-held positions and scrambling to offer distressed voters more immediate relief from spiraling costs. The change has been most striking on the campaign trail, where Obama said in a speech Monday that he would abandon his past position and support tapping the Strategic Petroleum Reserve to quickly cut prices at the gasoline pump.