WASHINGTON/NEW YORK (Reuters) – Late last year, Iran issued a series of not-so veiled threats to the West, suggesting it could use its “oil weapon” to show displeasure over toughening sanctions by halting exports or disrupting the Strait of Hormuz.

This weekend, the Group of Eight nations may offer a timely retort: We’ve got an oil weapon of our own, and we’re not afraid to use it.

After months of intense but quiet diplomacy with key allies, President Barack Obama may secure the support of the G8 to essentially pre-authorize a release of strategic reserves later this summer, just as U.S. and European sanctions on Iran come into force.

G8 leaders at this weekend’s summit at Camp David will discuss a “range of options” to address oil market strains, Tom Donilon, President Barack Obama’s top security aide, told reporters. The Japanese news agency Kyodo reported on Wednesday that Obama would urge leaders to support plans to release reserves.

While leaders are likely to stop short of any hard and fast commitment to intervene in the oil market, the talks will show that this month’s slump in oil prices hasn’t deterred Obama from moving toward tapping the Strategic Petroleum Reserve (SPR) again – an unprecedented second release for a U.S. president.

U.S. crude oil has tumbled 12 percent this month, dropping to the lowest since before a November U.N. report on Iran’s atomic program which kindled global fears.

Obama’s focus on the SPR carries risks: Republicans will blast the White House for using a national security tool to buy votes; Saudi Arabia and other OPEC allies may cry foul for having their market-balancing role usurped; and some consumer nations, like Germany, have resisted suggestions of using stockpiles.

WASHINGTON (Reuters) – The U.S. Environmental Protection Agency said drinking water is safe to consume in a small Pennsylvania town that has attracted national attention after residents complained about hydraulic fracturing, or fracking, for natural gas.

The EPA has completed testing water at 61 homes in Dimock, Pennsylvania where residents have complained since 2009 of cloudy, foul-smelling water after Cabot Oil & Gas Corp drilled for gas nearby.

“This set of sampling did not show levels of contaminants that would give EPA reason to take further action,” Roy Seneca, a spokesman for the regional EPA office, said about the final set of data released Friday. The agency released data for only 59 of the homes as they could not contact residents at two of them.

Dimock became ground zero for the debate about fracking after Josh Fox, the director of Oscar-nominated 2010 documentary called “Gasland,” visited the town and met residents who feared their water was contaminated by the drilling.

Techniques including fracking have revolutionized the U.S. natural gas industry by giving companies access to vast new reserves that could supply the country’s demand for 100 years, according to the industry.

Environmental and health groups, however, say that some fracking operations near homes and schools pollute land and water.

The EPA will re-sample four wells where previous Cabot and state data showed levels of contaminants, but where EPA’s first round of testing did not find levels that would require action, Seneca said.

WASHINGTON, April 30 (Reuters) – A regional Environmental Protection Agency chief based in Dallas resigned on Monday, days after Republican lawmakers uncovered comments in which he compared his enforcement of energy companies with crucifixion.

Al Armendariz, who was the chief of EPA’s Region 6 office, which includes refinery-rich Texas, Louisiana and three other states, sent a letter of resignation to EPA Administrator Lisa Jackson late on Sunday. She accepted on Monday.

“I have come to the conclusion that my continued service will distract you and the agency from its important work,” Armendariz said in the letter.

He became a casualty in a war Republicans in Congress have waged against a raft of EPA rules on pollution from fossil fuel plants they say risk damaging the economy.

Lawmakers including Senator James Inhofe, a Republican and long-time critic of the EPA, circulated a link to a video of an Armendariz speech in May 2010, in which he compared his enforcement strategy on energy companies that had broken the law to that of Romans taking over towns in the Mediterranean.

“They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them,” he could be heard saying in the video, shot months after he had taken the job. “And that town was really easy to manage for the next few years.”

He said his strategy was to make an example of companies that were not complying with the law, in the comments made at a council meeting in a small Texas town.

WASHINGTON, April 27 (Reuters) – The Obama administration is unlikely to pull back from levying sanctions against Iran oil transactions based on a government report due on Friday, which is expected to show crude markets are sufficiently well-supplied to move forward with the penalties.

The report, which the U.S. Energy Information Administration is required to produce every two months under the sanctions law aimed at curbing Tehran’s nuclear ambitions, could walk a fine line in assessing the state of markets, according to analysts.

Oil markets have relaxed significantly since earlier this year, when prices reached post-2008 records as European and Asian oil customers cut imports from Iran. Top oil exporter Saudi Arabia has increased supplies, as has fellow OPEC producer Libya, while U.S. domestic output continues to grow.

“I think there is pretty broad consensus in the market relative to two months ago that things are loose right now,” said Trevor Houser, a partner at Rhodium Group and a former State Department adviser.

However, some analysts expect the report, which should be released at midday on Friday, to maintain a neutral tone, leaving President Barack Obama sufficient room to authorize a release of emergency oil stockpiles to help cool off gasoline prices, which have become a key issue in the presidential race.

Average U.S. gasoline prices have declined in recent weeks, but still remain near $4 a gallon, and the administration has said all options — including a release of crude from the Strategic Petroleum Reserve — are on the table to bring relief to consumers and ease the threat of high fuel costs hurting the struggling economy.

“I think the EIA is going to say, ‘look: it’s still a dangerous world out there despite some builds in stocks,’” said a Washington-based energy consultant and former White House energy adviser, who did not want to be named.

WASHINGTON, April 22 (Reuters) – Iran’s trading partners are looking for ways to avoid being hit by U.S. sanctions on Iranian oil transactions that take effect mid-year, with Turkey looking for other suppliers, India exploring options and smaller Asian countries arguing their imports from Tehran are tiny.

Turkey, the fifth-largest buyer of Iranian oil, has committed to reduce its crude from Tehran by 10 percent and the country’s only refiner, Tupras, a unit of Koc Holding , has pledged to cut imports by 20 percent.

“The bottom line is that there are alternative suppliers. We are not buying at a subsidized price. We are buying at an international price,” Turkish Finance Minister Mehmet Simsek told reporters on the sidelines of the Group of 20 finance ministers meetings in Washington last week.

“We obviously comply with United Nations sanctions. With U.S. sanctions, of course now we are looking at basically options out there in terms of oil. It’s premature but something is being worked out,” he said.

India, the second largest buyer of Iranian crude, said it was exploring options. “We are having some problems on how to fund the (oil) import because we have to pay back the oil import,” India’s finance minister Pranab Mukherjee told Reuters on the sidelines of the G20 meetings.

“That’s one of the problems but we are exploring different possibilities,” he said.

The U.S. penalties are designed to crimp Tehran’s oil revenues by stopping financial institutions from conducting oil transactions with Iran’s central bank, which handles most of the country’s oil payments. If countries do not significantly reduce their Iranian oil imports by mid-year, they could see their banks blocked from U.S. markets.

WASHINGTON (Reuters) – The head of the U.S. nuclear safety regulator reiterated on Friday he does not bully women, a day after President Barack Obama said he would renominate one of the agency’s commissioners who had accused the chairman of ill treatment.

“There’s been a little bit of talk recently about my treatment of women … any of these accusations that I specifically target women are categorically untrue,” Gregory Jaczko, chairman of the Nuclear Regulatory Commission, told a hastily arranged news conference at the National Press Club.

Jaczko said he does not have a temper problem and has done nothing at the commission that could be perceived as abrasive.

Jaczko’s management style has been in focus since an internal watchdog last June described him as hot-tempered.

His four colleagues on the five-member commission – two Democrats and two Republicans – took the unprecedented step last year of complaining to the White House about his behavior, and testified to Congress about their concerns in December.

The issue was revived this week when Republicans complained that the renomination of Kristine Svinicki, a Republican on the panel, has been held up.

NOT MUCH ON HIS SCHEDULE

WASHINGTON (Reuters) – U.S. environment regulators will postpone implementation of standards requiring natural gas and oil drillers to cut emissions when they finalize the long-delayed regulations on Wednesday, an industry group and an environmental group said.

Drillers that use hydraulic fracturing, or fracking, and other methods to extract natural gas and oil will not be required to add equipment to capture smog-forming emissions at wells until January 2015, the groups said.

That would be a delay of more than two years from an initial proposal the agency made in July.

The Environmental Protection Agency, which did not immediately respond to the comments, is under court order to finalize the rules that have been delayed four times since September. It said Wednesday it will hold a press conference call at 1 p.m. EDT (1700 GMT) to discuss an announcement on clean air.

The Obama administration is attempting to balance its support for an industry that could help the United States become a major exporter of natural gas with how to address concerns about its safety.

Environmentalists and health groups have complained that fracking operations near schools and homes can harm air and water supplies.

“Today’s announcement (will be) clearly a bad news, good news story,” said a source at an environmental group, who did not want to be identified ahead of the release of the rules. The source welcomed administration’s decision to move forward with rules even if the phase-in of requirements is extended.

WASHINGTON (Reuters) – President Barack Obama streamlined federal oversight of natural gas production from shale on Friday as the drilling boom has depressed prices for the fuel and increased pressure on the administration to allow companies to export it.

Obama issued an executive order creating an interagency group to oversee development of natural gas, building on a pledge he made in his State of the Union address in January to support the industry while increasing safety.

A government source said the panel would not increase regulation. Energy industry groups praised the presidential directive.

Vast new sources of shale gas, which drillers access with techniques including hydraulic fracturing, or fracking, have flooded the United States with the fuel, decreasing costs for industrial and residential users. Prices for the fuel have fallen to 10-year lows, leading some producers to ask for permission to export the fuel just years after the country was expected to become a major importer.

The boom has also alarmed environmentalists and health groups which say that fracking operations near homes and schools can pollute air and water.

“It is vital that we take full advantage of our natural gas resources, while giving American families and communities confidence that natural and cultural resources, air and water quality, and public health and safety will not be compromised,” Obama’s directive said.

EXPANDED OUTPUT, HIGHER COSTS?

WASHINGTON, April 11 (Reuters) – The Obama administration set a goal on Wednesday of building three gigawatts of solar, wind, and geothermal power capacity on U.S. military installations by 2025 that could require about $20 billion in private financing.

“We are doing it not principally to be green, we’re doing it principally to provide greater security for our installations,” an administration official told reporters in a teleconference.

The renewable electricity capacity, which is the equivalent of three nuclear power stations, would be built on installations mainly in the United States, many of which have directly supported the wars in Iraq and Afghanistan. Currently the installations rely on the commercial power grid for electricity.

“We have concerns that if the grid were disrupted for any length of time critical missions that we carry out on our installations could be at risk,” the official said.

The goal builds on President Barack Obama’s announcement in the State of the Union address in January that the Navy has pledged to develop 1 gigawatt of renewable power on its installations by 2020.

The Air Force plans to develop 1 gigawatt by 2016 and the Army plans to obtain 1 gigawatt by 2025, administration officials said.

As average U.S. gasoline prices hover near $4 a gallon this election year the administration is touting an “all of the above” energy strategy to increase development of both conventional and alternative energy. As Republicans blame Obama for high fuel prices he has said there is no silver bullet to tamp down prices for oil which are set on global markets.

WASHINGTON (Reuters) – The Obama administration’s man in charge of squeezing Tehran over its nuclear program is unapologetic for the strain Western penalties on Iran have exerted on global oil markets.

The price of oil has shot up nearly 15 percent since January, companies that trade with Iran are struggling to get paid and the biggest Asian countries are scrambling to work around U.S. sanctions that aim to deprive Tehran of revenue needed to develop its nuclear program.

Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, said that pressure has forced Iran to pay attention to U.S. demands.

“Do we think we have the attention of the leadership on their end? We have it like never before,” Cohen said in an interview.

Cohen’s comments are the latest display of administration confidence in the measures, despite obvious signs their bite is rippling through the marketplace faster than many had expected.

J.P. Morgan warned on Thursday of an acceleration of Iranian oil cutbacks, predicting Iranian supplies could be slashed by one million barrels a day in the first of the year.

The White House has not yet stated its position on proposed new bipartisan Iran sanctions legislation in the United States that would target Iran’s main oil and tanker companies, as well as tighten up other loopholes. Mindful of the potential to cause more uncertainty over supply and push world oil prices higher, some senators are seeking amendments to the new sanctions package to assure insurers of allowed oil shipments that they will not be stung by sanctions. But Senate Majority Leader Harry Reid has so far said he does not want to allow the package to be amended.