by Randolph T. Holhut
American Reporter Correspondent
May 23, 2008
TIME FOR SOME REAL ACTION ON ENERGY ISSUES
DUMMERSTON, Vt. -- The Strategic Petroleum Reserve, a system of salt caverns on the Gulf coast created in the 1970s to respond to major oil supply disruptions, currently holds 701 million barrels of oil and is at 97 percent of capacity.
So with crude oil selling for more than $130 a barrel and gasoline approaching $4 a gallon in the United States, why should the federal government continue to pump about 70,000 barrels of oil a day into this emergency reserve?
That's why Congress voted overwhelmingly last week to direct the Bush Administration to suspend the shipments of oil for the rest of the year to the Strategic Petroleum Reserve to increase the amount of oil on the open market and perhaps lower prices for gasoline and fuel oil. The Senate voted 97-1 for the measure, while the House voted 385-25 in favor.
Those margins are a sign of the strong bipartisan support for the measure. Even though President Bush opposes any congressional mandate to stop deliveries, he reluctantly (and quietly) signed the bill earlier this week
And, of course, Mr. Bush and the Republicans still insist the answer to lowering oil prices is opening the Arctic National Wildlife Refuge in Alaska and some offshore waters that are now off-limits to oil development, even though the amount of oil this might generate would not justify the environmental damage that would be done.
The Vermont Congressional delegation was front and center on this measure. Rep. Peter Welch co-sponsored the House bill, while Sen. Bernard Sanders was a co-sponsor of the Senate bill.
"This is a small but important step forward in providing some relief to consumers who are paying record prices at the pump," said Sanders after the Senate vote.
It may not seem like a lot, but 70,000 extra barrels of oil a day on the market can make a real difference in the price at the pump. And each of the last three presidents have either tapped or temporarily suspended shipments into the Strategic Petroleum Reserve.
For example, when fuel prices spiked sharply in 2000, President Bill Clinton put 30 million barrels of oil from the reserve on the open market and prices dropped from $30 to $20 a barrel.
Oil industry analysts at Goldman Sachs, the investment banking firm which recently predicted oil prices could reach $200 a barrel by next year, estimate that continuing to fill the emergency reserve has added as much as 25 cents to the price of gasoline in the United States.
But, as Rep. Sanders has often pointed out of late, our nation needs get serious about its energy policies.
"Long term, we must aggressively transform our energy system away from fossil fuels and foreign oil into energy efficiency and sustainable energy," said Sanders.
"(This bill) is a good start, but much, much more needs to be done. In my view, we need to pass a windfall profits tax on the oil companies and deal aggressively with financial institutions and hedge funds that are speculating in oil futures and driving the price higher than it otherwise would be."
Unfortunately, there is still too much opposition in Congress to taking the steps Sanders proposes. While last week's vote was a signal to energy markets to curb the speculation that has driven up crude oil prices, few in Congress want to take on the oil companies or the Wall Street speculators that are such a ready source of campaign donations.
The courage of Reps. Welch and Sanders, who have pushed hard over the past year to smash the influence of big oil on our national energy policy, needs to spread to more members of Congress. The U.S. economy is beginning to buckle under the weight of out-of-control energy costs. Americans need immediate price relief now, and a working blueprint toward a future beyond oil, coal and nuclear power. All that's lacking is the will.
AR Correspondent Randolph T. Holhut has been a journalist in New England for more than 25 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at firstname.lastname@example.org.