The question of whether the United States should resume building an emergency reserve of oil is coming to a head. Political pressure in Congress to add more oil to the nation's strategic petroleum reserve is mounting as the Carter administration looks to the June 9 meeting of the Organization of Petroleum Exporting Countries (OPEC) for an indication of whether the world oil market will be stable enough over the remainder of the year to permit such stock piling.
A congressional conference committee that recently approved energy legislation to establish a federal synthetic fuels corporation, also agreed to consider later this month adding to the bill an amendment calling for resumption of the oil storage program.
"The strategic petroleum reserve is the single non-controversial element of energy policy. On a cost-benefit basis, the program is a good idea, and the bigger the better," contends Gina Despres, an energy aid to Sen. Bill Bradley (D) of New Jersey, and advocate of stockpiling more oil.
Ironically, it was OPEC and the 1973 Arab oil embargo that made clear the US need for a strategic oil reserve. Storage began in mid-1977 with the goal of stockpiling 1 billion barrels of oil, although Congress has authorized buying only 750 million barrels of oil.
But oil purchases ceased in November 1978 when the revolution in Iran disrupted the world oil market, and the Carter administration reasoned continued storage would only make supply shortages worse. Although there has been a surplus in world oil supplies since last fall, the program has not resumed.
In total, the United States has 92 million barels of oil stored in salt caverns in Texas and Louisiana for use in the event of a cutoff in imports.That is about two weeks of foreign oil supplies at current import levels.
But a US strategic oil reserve has become very controversial in world politics. Saudi Arabia, which increased production by 1 million barrels a day last year to offset the drop in Iranian production, opposes the idea.
The Saudi government has reportedly threatened production cutbacks if the US storage program resumes. They opposed the program, most knowledgeable US sources agree, because it would tighten world oil supplies and undercut their efforts to restore the price unity they seek in OPEC. Also, a large US petroleum reserve would blunt the effectiveness of any future Middle East oil export embargo.
While some analysts feel the Saudi threats should not be taken too seriously, energy economist Stephen L. McDonald of the University of Texas at Austin disagrees.
"There is a real question in my mind of whether they will let us store more oil," he says. Saudi Arabia might well cut production to such an extent that US storage would be impossile without a domestic oil rationing program, Mr. McDonald warns.
Another consideration in the possible resumption of the strategic petroleum reserve program is how it would affect oil supplies to Western allies of the United States. At last year's Tokyo summit, President Carter agreed to consult with the allies before resuming oil puchases for the US reserve. The leaders of the Western nations will meet in Venice, Italy, June 22 and 23. Sources say there is strong likelihood that the US oil reserve issue will be discussed.
The US Department of Energy is considering buying oil domestically if the storage program resumes. One option would be storing oil now produced on federal lands but sold to private contractors.
Saudi Arabia's Oil Minister, Sheikh Ahmad Zaki Yamani, is pushing for price unity at the OPEC meeting, and US officials say the success of that effort as well as Saudi production targets for the rest of 1980 could greatly influence whether the US oil reserve program gets back under way.