[Congressional Record Volume 144, Number 40 (Wednesday, April 1, 1998)]
[Extensions of Remarks]
[Pages E537-E538]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 U.S. OIL RESERVES--BUY HIGH, SELL LOW?

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                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                        Wednesday, April 1, 1998

  Mr. MILLER of California. Mr. Speaker, the Department of Energy is 
about to sell off more than $207 million worth of oil owned by U.S. 
taxpayers from the Strategic Petroleum Reserve. At today's low prices, 
that means the United States would dump about 20 million

[[Page E538]]

barrels of oil on a market already awash with oversupply.
  Congress created the Reserve in 1975 to avoid the devastating effects 
on our national security and our economy that could be caused by the 
kind of shortages that occurred when other oil-producing countries 
stopped producing in order to drive up the price of oil and gas.
  Last year, Congress directed the DOE to sell over $200 million worth 
of oil--essentially covering the cost of operating the Reserve. But 
shouldn't we think about the wisdom of proceeding with this plan at 
this time?
  Isn't it foolish to liquidate federal oil reserves now, when oil and 
gas are selling at very low prices? Even if the price of oil rebounds 
this year, we would still be selling these federal assets for far less 
than the $27 to $30 per barrel it cost us to acquire them. Secretary of 
Energy Federico Pena agrees, noting, ``This is the worst time to be 
selling oil out of the Strategic Petroleum Reserve.'' Good economics 
would suggest that we buy oil for the Reserve now--not sell it.
  On March 26, the Senate accepted an amendment to its supplemental 
appropriations bill to rescind the sale. The House bill passed earlier 
this week does not rescind the sale. On behalf of taxpayers who stand 
to lose millions is this unwise liquidation proceeds, I would hope that 
the House conferees will accept the Senate position in Conference.

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