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U.S. not ready to release oil reserves

High price of gas is not an emergency.

WASHINGTON - Energy Secretary Samuel Bodman rejected a call yesterday by some members of Congress to release oil from the government's emergency stockpile, saying the reserve oil is needed to respond to future supply emergencies and not to influence prices.

Bodman also said at a House hearing that he did not believe rampant market speculation was causing record high oil prices. He said the prices were a matter of supply and demand that could be traced to essentially flat global production over the last three years.

Rep. Edward Markey (D., Mass.) said he did not understand why President Bush was not releasing oil from the Strategic Petroleum Reserve to force down prices. "We have 700 million barrels . . . that are ready to be deployed," Markey said.

Bush recently stopped putting oil into the reserve after Congress passed legislation to halt deliveries.

But Bodman said he would not recommend oil being released from the reserve.

The stockpile of 701 million barrels "is meant to deal with . . . the physical interruption of the flow of oil to our country. We don't have that issue today," he told the House Committee on Global Warming.

Markey said the release of government oil was justified because "we're in an economic crisis" as high oil costs are driving gasoline to $4 a gallon and increasing costs for food and other goods.

"The American people are being tipped upside down and having money shaken out of their pockets," he told Bodman.

Oil from the Strategic Petroleum Reserve - three underground salt domes in Texas and Louisiana - has been used twice to respond to supply disruptions or the threat of such interruptions: Just before and during the first Gulf War in the early 1990s and in response to the loss of Gulf of Mexico oil after Hurricane Katrina in 2005.

But President Bill Clinton made reserve oil available in 2000 to relieve prices, and Markey said they then fell 18 percent.