Yesterday Sen. Bingaman was a guest on Fox News Channel’s “Your World with Neil Cavuto.”  The theme of that business program was “Gas Pains,” and the central question was “With oil prices so high, should we stop filling the Strategic Reserve?” 

Sen. Bingaman and Congressional Democrats support the Administration’s ultimate goal of filling the Strategic Petroleum Reserve to its 700 million barrel capacity.  But the reserve is already 98 percent full, and Sen. Bingaman has questioned why we have to finish the job (which has been under way for nearly 28 years) now, when gasoline supplies are so tight.

Last month, in a letter to Energy Secretary Bodman, Bingaman urged the Administration to suspend oil deliveries to the reserve until oil markets stabilize and gasoline prices come down.  He repeated that appeal during his conversation with Mr. Cavuto.

White House Press Secretary Scott McClellan on Wednesday announced that President Bush will give a major speech next week about energy and rising energy prices and the need to address this.  We know that Fox News is a West Wing favorite.  Let’s hope that the President and his advisors were tuned in yesterday.

CAVUTO: “Well, with energy prices a big concern these days, my next guest wants the President to stop filling up our emergency reserves.  With us now is U.S. Sen. Jeff Bingaman of New Mexico.  Senator, thank you for joining us.”

BINGAMAN:  “Good to be with you.”  

CAVUTO:  “You know, I guess your argument is, the reserves are mostly full anyway.  We don’t need it.  We need to address more of the fact of these higher prices.  Is that it?”

BINGAMAN:  “Well, yes.  The reserve is 98 percent full, in fact.  And it’s never been that full in the history of our country.  And my argument is two-fold.  One, this is oil that ought to be kept on the markets.  It would help to keep the prices from going high, or higher than they already are.  And it’s just bad economics to be buying oil at these kinds of prices.  The government is essentially, every time it takes this oil and puts it into the Strategic Petroleum Reserve, it is agreeing to buy oil at these extremely high prices.”

CAVUTO:  “But that’s assuming, senator, that they’re going to go still higher.”

BINGAMAN:  “Well, that is assuming that.  And, historically, since oil prices have never been this high before, I think that’s a reasonable assumption to make.”

CAVUTO:  “Well, sir, I talked to a number of your counterparts about a year ago at this time, when we were at about $36-37 oil.  And they were saying, ‘You can’t keep buying it at these high prices. You can’t keep buying at these high prices.’  Now that would seem like a bargain basement buy, right?”

BINGAMAN:  “Well, it would, obviously.  But, as I say, we’re 98 percent full now in the Strategic Petroleum Reserve. We’re not significantly effecting our long-term security by continuing to buy more oil and take it off the market. So, we should stop.  The sooner the better.”

CAVUTO:  “Let me ask you, sir, do you think that just stopping adding oil to the reserves leads to the price going down?  After all, Saudi Arabia has opened a spigot.  They’re producing more than they said they would.  We’ve seen much of OPEC simply opening up the spigot as much as they could.  And, yet, these prices have climbed.  Now, this last week, they’ve slowed a little bit.  But what do you make of that -- that maybe this is something over which day-to-day control is next to impossible?”

BINGAMAN:  “Well, I would agree that there are a lot of factors impacting the price of oil.  And, clearly, we need to be encouraging our allies to produce more to keep up with demand.  There’s a lot of increase demand in Third World countries, particularly in China and India.  So, all those are major factors.  I’m just saying we need to identify the few things that we can do ourselves to help moderate the impact of this. And we ought to do them.”

CAVUTO:  “Sen. Jeff Bingaman, appreciate it, sir.  Thank you very much.”

BINGAMAN:  “Good talking to you.”

CAVUTO:  “Jeff Bingaman of New Mexico from Capitol Hill.”

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Bill Wicker

Democratic Communications Director

Senate Energy & Natural Resources

202.224.5243