Senators to Prez: Stop stockpiling oil at a time of crisis

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Sen. Hutchison: “Immediately Halt Deposits in the Strategic Oil Reserve”
Published in Texas Insider: 04-30-08
Letter to the President Signed by 16 Senators, Cites “Busiest Driving Season” of the Year

WASHINGTON – U.S. Senator Kay Bailey Hutchison (R-TX), Chairman of the Republican Policy Committee, today urged the administration to immediately halt deposits of domestic crude oil into the U.S. Strategic Petroleum Reserve (SPR).

“The SPR had 554 million barrels when President Bush took office and today it has over 701 million barrels,” Sen. Hutchison said. “We are in an extreme circumstance, now that oil is around $120 a barrel. I support an immediate halt in the deposits of domestic crude into the SPR as we enter the busiest driving season of the year.”

The letter was signed by Senators Jon Kyl (R-AZ), John Barrasso (R-WY), Kit Bond (R-MO), Sam Brownback (R-KS), Saxby Chambliss (R-GA), Susan Collins (R-ME), John Cornyn (R-TX), Elizabeth Dole (R-NC), Judd Gregg (R-NH), Orrin Hatch (R-UT), Johnny Isakson (R-GA), Lisa Murkowski (R-AL), Jeff Sessions (R-AL), John Sununu (R-NH), and Ted Stevens (R-AK). Sens. Murkowski, Sessions, and Barrasso are members of the Senate Energy Committee.

TEXT OF THE LETTER
April 29, 2008

The Honorable George W. Bush
President of the United States
Washington, D.C. 20500

Dear President Bush:

We write today to request that the U.S. Department of Energy (DoE) immediately halt deposits of domestic crude oil into the U.S. Strategic Petroleum Reserve (SPR). As we enter the busiest driving season of the year, the price of a barrel of West Texas Intermediate crude oil hovers around a record $120.

The SPR was established in 1975 to provide a supply of crude oil during times of severe supply disruptions. Today, the SPR contains more than 701 million barrels of oil, exceeding our International Energy Program commitments to maintain at least 90 days of oil stocks in reserve.

High energy prices are having a ripple effect throughout the U.S. economy and exacerbating recessionary pressures. The Energy Information Agency reports that supplies and inventories of crude oil and refined products are above 2007 inventories while our demand for gasoline is down. Yet, the price of crude oil has skyrocketed 100% from last year’s levels which were just above $63 a barrel in April, 2007. Despite these economic realities, the DoE recently solicited contracts to exchange up to 13 million barrels of royalty oil from Federal leases in the Gulf of Mexico for deposits in the SPR.

Some analysts blame geopolitical instability and disruption in production for the rapid price increases; however, these factors alone do not explain the extraordinary increase in oil prices compared to previous years, when these same challenges were present. Temporarily halting deposits to the reserve can provide some relief because the increased supply of oil available for refinement will send the right signal to all markets that the U.S. Government will take measures necessary to address exorbitant crude oil prices that negatively affect the global economy. We believe, in light of the dramatic increase in oil prices, a temporary halt to deposits into the SPR should be considered until the economy stabilizes.

I appreciate your attention to this matter and look forward to hearing back from you.

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