DOE Stops Diverting Oil
May 16, 2008
05:36 PM
Chairman Bingaman expressed satisfaction at the Department of Energy’s decision today to stop adding oil to the nearly-full Strategic Petroleum Reserve (SPR). The Department’s decision not to sign contracts this year for oil shipments to the SPR comes at a time of record fuel costs, and it follows overwhelming votes this week in Congress asking President Bush to hit the pause button on filling the reserve.
“While everyone agrees that having oil in an emergency reserve is extremely important, no one can make the case that filling the reserve makes sense when oil prices are rising the way they are,” Bingaman said. “DOE has made the right call. Suspending the SPR fill will keep the government from competing for oil in the marketplace and driving up fuel costs across America.”
Wednesday night, the Senate unanimously passed a bill (H.R. 6022) which temporarily ends the diversion of royalty oil owed to the Federal government from the open market into the SPR. This Congressionally-ordered action should not be mistaken as a solution to all our nation’s energy woes, but it’s certainly a sensible start.
Senator Bingaman was a strong advocate for this bill, and that reflects a continuation of the leading role he has played in setting SPR policy over the past decade. In 1997 and 1998, he led the effort to stop sales of oil from the SPR as an offset to other spending in the Interior Appropriations Act. When oil prices reached their low point in 1999-2000, Bingaman was among the first to call for the use of the Government’s royalty oil as a means of filling the SPR. For the last few years, as it has become apparent that this policy was essentially placing the SPR in competition for oil in a tightening market, he has advocated ending these deposits.
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