“We can’t drill our way to lower prices,” said Sen. Dick “Head” Durbin, D-Ill.
Hey Dick, if we can’t drill our way to lower prices then why did this vote occur in the first place? If your desire is to increase the supply to the public, then why not actually increase the supply to the public?
Senate Passes Halt On Oil Stockpiling To Curb Gas Prices
A veto-proof majority in the Senate voted Tuesday to stop filling the Strategic Petroleum Reserve to try to curtail soaring gasoline prices.
The vote dealt a setback to President Bush’s policy of boosting oil stockpiles in the event of a major supply disruption. But it had a limited immediate market impact.
Crude oil spiked to $126.98 a barrel on fuel oil demand and Iran’s talk of cutting exports. Oil shed some gains on the SPR vote, but still closed up $1.57 at $125.80.
The Senate voted 97 to 1 to halt crude deliveries now averaging 70,000 barrels a day until the price of oil drops below $75. That’s less than 0.1% of global demand of 87 million barrels. A House vote was scheduled later in the day.
The Energy Information Administration estimates stockpiling 100,000 barrels a day adds $2 a barrel to the price of oil and 4-5 cents a gallon to gasoline.
House Speaker Nancy Pelosi’s office says an SPR halt could save drivers 5-24 cents a gallon.
Influential oil economist Philip Verleger told Congress in December that filling the strategic reserve “may have added as much as 10% to the light sweet crude price.”
He suggests the Energy Department sell light sweet crude stocks and fill the SPR with more-plentiful sour crude, which has a higher sulfur content. That means refiner rules would need to be relaxed in an emergency, he says.
The White House has kept boosting crude stockpiles over growing criticism. Bush argues that preparing for a national emergency trumps the negligible price declines that would result.
He proposed doubling SPR capacity to 1.5 billion barrels in his 2007 State of the Union address. The reserve now holds just over 700 million barrels, enough to cover 58 days of imports.
“Congressional tampering with presidential authority to fill the SPR may be unconstitutional,” wrote Heritage Foundation senior fellow Ariel Cohen. The move “interferes with the executive branch’s authority to conduct national security policy.”
Republican lawmakers are parting ways with Bush on the strategic reserve, but they are united in supporting more domestic drilling.
“(W)e’ve been heartened that by bringing up the SPR plan Democrats are conceding a link between increasing our supply and reducing our price at the pump,” House Minority Leader John Boehner and Republican Whip Roy Blunt said in a statement.
They noted in a letter to Pelosi that opening the Arctic National Wildlife Refuge to drilling could eventually yield 1 million barrels per day. The Senate on Tuesday voted 56 to 42 against a bid to open ANWR.
The senators also urged Congress to lift restrictions on deep-water drilling off U.S. coasts.
Meanwhile, Democrats are pushing a resolution to halt arms sales to Saudi Arabia until it ups oil output.
“If Saudi Arabia and other OPEC countries do not substantially increase production, we in Congress will block their lucrative arms deals,” said Sen. Charles Schumer, D-N.Y.
Democratic leaders haven’t backed a federal gas-tax holiday proposed by presidential contenders Sen. Hillary Clinton, D-N.Y., and Sen. John McCain, R-Ariz.
Related:
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200 Billion Barrels Of Oil That Could Make The U.S. Energy Independent
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