After Japan quake, Obama holds firm on oil reserves and drilling

Washington Bureau

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.

Photos: Scenes from the earthquake

"The global community can manage supply disruptions like this," the president said. "Other oil-producing nations have committed to filling any gaps -- and we will continue to coordinate closely with our international partners to keep all options on the table when it comes to any supply disruptions."

Along that line, Obama preached caution, saying he did not immediately plan to release oil from the nation's strategic reserves to ease price hikes. And while he said he was prepared to tap into the reserves at some point, he specifically refused to identify at which point gas prices might spike high enough to push him to do so.

And the shutdown of several nuclear power plants in Japan may force that country to import more oil, which could cause prices to rise even further, analysts said.

Videos of the earthquake

The struggle by Japanese authorities to cool a hot nuclear reactor north of Tokyo damaged in the wake of the earthquake came just a day after Republicans on the Hill called for a renewed commitment to nuclear energy in the U.S and a streamlined process for approving new domestic nuclear facilities.

The United States imports virtually no oil from Libya, whose oil reserves contribute just a fraction of the world's supply. Obama suggested that the unrest in that nation was not yet significant enough to push him to tap into the nation's petroleum reserve, which currently holds around 727 million barrels of oil.

Under attack from Republicans, who maintain Obama has done little to promote domestic oil production, Obama said he's increased the nation's output since 2005. He said he will work to encourage the industry to develop oil production on inactive leases, both offshore and on land, and has directed his administration to explore new frontiers of production. GOP members of Congress have accused the Interior Department of dragging its feet in approving new permits for drilling in the Gulf of Mexico.

"Any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn't match up with reality," Obama said. "We are encouraging offshore exploration and production. We're just doing it responsibly. I don't think anybody has forgotten that we're only a few months removed from the worst oil spill in our history."

But he also argued that domestic production is not a long-term solution to the problem of American oil consumption."Even if we started drilling new wells tomorrow, that oil isn't coming on line overnight," he said. "And even if we tap every single reserve available to us, we can't escape the fact that we only control 2% of the world's oil but we consume over a quarter of the world's oil."

Photos: Scenes from the earthquake

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