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Our -- -- -- disruption of energy operations in the Gulf of Mexico brings a highly contested question back to the forefront.
Should President Obama released oil from the strategic reserve was shaken up but -- team of energy industry experts.
And find out.
We have an expert on many things that's Peter -- standing by in Washington.
We -- -- -- as well but I do wanna start with you call Larry.
And talk about the White House at this point -- the fact that they're still some what kind of hedging their bets if you will.
And -- -- being cagey I guess is the best word about an SPR release.
Yeah -- no decision yet -- but there you know part of the reason why this is on the table is because the Gulf Coast accounts for about 20% of total US oil production and about 7% of natural gas output.
The government is reporting that Isaak has disrupted.
Of oil production down there and 72% of gas production meanwhile.
Refineries are down 900.
Thousand barrels a day that's about 5% of total US capacity so this is all jetting up talk about possibly.
Tapping the strategic petroleum reserve the G-7 putting out a statement saying we stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market.
As fully and timely supplied the White House only saying at this point that the option of tapping the SPR remains on the table Cheryl.
OK -- wanna bring in Carl Larry -- in studio with me right now his oil outlooks and opinion CEO and founder.
So what do you make of all of us I mean it that do you think there is justification.
For -- release from the SPR or do you think this is purely political.
Well right now there's not really a fiscal disruption -- I think what we see Sami -- that in the gulf of Libya platform gets damaged.
We won't know until next couple days but until then there's not really much that I think it's gonna really trigger SPR release.
Now again if they do it because very political they're very -- hot topic.
Yeah what I'll take us -- In a behind the scenes at the White House what justifies.
Truly just supplies.
Released from the SPR.
It's you have to look at the whole world situation and then you're looking -- how much oil is laws to which in this case is probably about one point three million barrels today.
And you're also trying to estimate how long it's gonna be lost to the market.
It takes a good three weeks to get the all from the reserve out to the market so if something like probably -- is going to be.
Where you're just gonna have an eruption -- -- you weaker to.
The strategic petroleum reserve is probably really not the right instrument to deal with it because it you can't just push a button and they all start so flowing.
No there is a world situation out there where you have Iran and other things come in and play.
But based on what we know.
And Isaak and what was just reported.
If you brought the oil out of the reserve right now you wouldn't have the refinery capacity to to actually produces so that the case for taking oil out.
From the reserve right now Fries it seems to me to be very weak whether you're talking about it publicly or privately.
OK well there you go those private discussions on -- -- happening in the White House.
I promise to shake it up -- -- bring in another voice and it just got discussions Spencer patent founder and CEO still one investments a joins me now from national are right Spencer.
I what what would the market impact be if if there was a release -- -- SPR.
Yeah this really becomes a much more dangerous situation because what what's keeping a little bit of a -- on the crude oil market is that thought that there could be this kind of release and so traders are are reluctant to go all -- because you can wake up and see at 2448.
Hour situation what you -- crawled down five dollars but what's really scary is that once you release them once the government makes that play.
Then they're they're out of bullets and and you could see crude oil.
Pull back five dollars and then rocket higher ten or fifteen more so from a trader's perspective it's so important that they do not release that -- that that that petroleum reserve because that's the only thing keeping a lid on this market when.
Geopolitical tensions seem to get more intense every day.
And -- recall back into discussion because Carl we did you also have to think about the timing of all this.
And the pricing of all this as we mentioned we did within the last two years have a release of -- SPR and it was a very short term impact.
On the market in the administration was criticized for that.
-- anything it's a problem here to -- we will be be criticized since close so close the election.
I think it brings -- really important part of the energy policy.
Because at this point I think -- Romney campaign disabled why didn't we open up the keystone pipe -- it was approved it sometime in the last six months of last year we wouldn't be deal with these issues -- -- hurricane right now.
You know day.
One of the things that thing here that that this -- emergency.
Sometimes gets a little you know model to be honest with you because what constitutes -- true.
-- to talk about this type of release of oil will we only have a certain amount you know on standby if you.
Yeah well you know the law governing the strategic petroleum reserve -- in 1975.
And at that time all prices were controlled by the federal government.
You know we didn't have much offshore drilling so as a whole different world so I think we need a little more clarity.
When things -- down to discuss this very issue that you raise.
We do have -- about 700000 or 700 million barrels in the reserve so you know we do -- -- a few bullets there to to use.
But in some ways they may be more powerful when they're sitting in reserve than when they're actually being policed but.
We have to keep in -- here to the Europe has its own problems with right now we're not -- is the depended on Middle Eastern oil as we used to be.
Europe is still very dependent on Middle Eastern oil so there's a lot of things that that come into play.
But -- -- you know I think we all agree that that something like I think is not a sufficient trigger.
Well I had to tell Atlanta to be all around for -- Keystone Pipeline debate but that's it had to be another -- Spencer before LA guy I do whatever we want that you're -- can look back at the 1970s you're -- the word emergency.
That wasn't -- emergency there -- gas lines across this country it was a very difficult time for the US economy do you foresee from an investment perspective a markets perspective.
As being in that situation again.
Think so in the near term my I think we're in that attack the situation where all the risk is really overseas and they aid geopolitical I ran Syria.
And who knows what could come of that of that so I think that's where we really have to keep our focus for saving that reserve for when that situation that now that a -- will flare up.
-- -- -- -- They -- -- all of you really interesting conversation.