Cover Story: Politics and petroleum

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - Everybody's got an angle.  Including the President.  The Obama Administration vows to release millions of barrels of oil from America's reserves.

It means much-need relief at the pump. So, what took so long? And what's in it for the White House?

We're talking about politics and petroleum.

President Obama and company just decided to release 30 million barrels of oil from the U.S. Petroleum Reserve.

High oil prices have increased the cost of gas. The national average is now $3.61.  That, of course, contributes to the recession.

The release comes as Americans enter the peak summer travel season that period of high energy use in July and August.

It's good news for drivers. Relief, for a change.

But we wanted to know: if we've got so much oil just sitting around why are we just now getting our hands on it?

What's the President's angle? Or is he just feeling generous?

Since late winter - early spring we've been paying about a dollar more a gallon for gas than a year ago.

And that's taken money that could have been used elsewhere in the economy.

Not only is high oil putting a brake on the economy it's threatening jobs - jobs all the way up the line to 1600 Pennsylvania Avenue.

The Strategic Petroleum Reserve is 727 million barrels of oil the government is sitting on.  It's stored in salt caverns along the Texas and Louisiana cost and was established after the Arab oil embargo in the 1970s.

It's been tapped only two times before during Operation Desert Storm in 1990-91.  And six years ago after Hurricane Katrina.

It's the largest emergency supply in the world.  The government's way of keeping the oil flowing should a spigot in the Middle East dry up.

That's not happening now.  Why then did the president take this step?

"There's really two things that matter in terms of how people evaluate presidents. One is the state of the economy. And the other is state of war and peace," says Dr. Eric Heberlig, a professor of political science at UNC Charlotte.

On war, President Obama announced Wednesday the U.S. is pulling troops out of Afghanistan.

On the economy, he's trying to do something about oil prices.

High oil - we see in the form of gas - is slamming the door on the recovery.

We're seeing signs of a slowdown now.

The number of people applying for unemployment rose last week more than expected.

And fewer people bought new homes last month, the latest sign that the struggling housing market won't rebound this year.

With gas high people have cut spending elsewhere.

Says driver Simone Autry of Charlotte:  "Mostly I spend money on just food and gas now. I don't really get to go out or anything like that. And I'll probably stay home a little bit more because of the price of gas instead of running around town yeah."

Bob Browning of Raleigh added:  "I don't go as many places as I used to and try to obviously think about a lot of things while I'm riding to accomplish more on the same ride."

Releasing some of the oil from the Strategic Petroleum Reserve it's hoped could bring gas prices down.

If the economy slows down Obama's job could be on the line going into next year's election.

No president since World War 2 has won a second term with a jobless rate above 7.2 percent.  Unemployment in the U.S. is now hovering around 9-percent.

"If the economy's not doing well you certainly need to find ways of improving the economy or at least creating the perception that you're actively seeking policies that will improve it," said political scientist Heberlig.

The U.S. is releasing 30-million barrels of oil over the next 30 days.  Other countries are adding another 30-million for a total of 60-million barrels onto the world market.

Analysts say the move will likely bring world oil prices down temporarily, but it's not clear how long that will last.

How much should we expect gas to come down?

In Charlotte, it's already come down about a quarter a gallon in the last month.

Oil had been trading at $110 a barrel.  It was down to about $90 a barrel in trading Thursday.  If it stays at that price that's expected to lead to decreases at the pump over the next several weeks.

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