[Congressional Record Volume 146, Number 22 (Thursday, March 2, 2000)]
[Senate]
[Pages S1128-S1130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SENATE CONCURRENT RESOLUTION 88--EXPRESSING THE SENSE OF THE CONGRESS 
        CONCERNING DRAWDOWNS OF THE STRATEGIC PETROLEUM RESERVE

  Ms. COLLINS (for herself, Mr. Schumer, Mr. Jeffords, Ms. Snowe, Mr. 
Lieberman, Mr. Moynihan, Mr. Levin, Mr. Leahy, and Mr. Dodd) submitted 
the following concurrent resolution; which was referred to the 
Committee on Energy and Natural Resources:

                            S. Con. Res. 88

       Whereas the price of crude oil has more than doubled in the 
     past year to over $30 per barrel, and prices of petroleum 
     products such as heating oil, diesel fuel, and gasoline have 
     reached record levels;
       Whereas a sharp sustained increase in the price of crude 
     oil negatively affects the overall economic well-being of the 
     United States;
       Whereas high oil prices harm people and businesses;
       Whereas the Energy Information Administration has 
     determined that Northeastern United States fuel reserves are 
     the lowest in 20 years and that Americans are ``skating on 
     thin ice'' in meeting energy requirements;
       Whereas the current price and supply crisis was largely 
     created through the actions of the Organization of Petroleum 
     Exporting Countries (``OPEC'') by market-distorting and 
     collusive production reductions, and OPEC's activities would 
     be in violation of United States antitrust laws if conducted 
     within the United States;
       Whereas OPEC has demonstrated unity not seen since the 
     energy crises of the 1970's;
       Whereas the United States has a Strategic Petroleum Reserve 
     of over 570,000,000 barrels of crude oil to protect against 
     threats to oil supplies;
       Whereas many experts, trade associations, and members of 
     Congress have called for a drawdown of the Strategic 
     Petroleum Reserve to combat OPEC's market distorting 
     behavior;

[[Page S1129]]

       Whereas a drawdown or the threat of a drawdown of the 
     Strategic Petroleum Reserve could provide a critical tool to 
     break the resolve of OPEC to practice market distorting 
     behavior, and a sale of oil from the Strategic Petroleum 
     Reserve would increase domestic supplies and drive down 
     prices in the short term;
       Whereas swaps from the Strategic Petroleum Reserve offer a 
     way to increase the overall size of the Strategic Petroleum 
     Reserve at no cost to the taxpayer; and
       Whereas low global inventories allow OPEC to retain 
     inordinate control over supply and pricing, and consequently 
     undue influence over the global economy: Now, therefore, be 
     it
       Resolved by the Senate (the House of Representatives 
     concurring),

     SECTION 1. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) using authority under existing law, directly through 
     time exchanges (or ``swaps'') or through other means, the 
     President and the Secretary of Energy should draw down the 
     Strategic Petroleum Reserve in an economically feasible 
     manner and to a responsible degree, to combat unfair foreign 
     trade practices of the Organization of Petroleum Exporting 
     Countries and alleviate the severely deleterious consequences 
     to people and businesses in the United States that those 
     practices have caused; and
       (2) the President and the Secretary of Energy should 
     prepare for future threats to the economy and energy supply 
     of the United States by developing methods to--
       (A) draw down the Strategic Petroleum Reserve quickly when 
     needed; and
       (B) increase the quantity of crude oil in the Strategic 
     Petroleum Reserve over time in an economically reasonable 
     manner.

  Mr. COLLINS. Mr. President, I rise today with my colleague, Senator 
Schumer, to submit a senate concurrent resolution expressing the Sense 
of the Congress that the Administration should act immediately to 
combat the anticompetitive campaign OPEC has waged on the world's oil 
markets. Through this resolution, we call upon the President and the 
Secretary of Energy to defend America's interests through the immediate 
release of oil from the Strategic Petroleum Reserve. We are pleased to 
be joined by Senators Jeffords, Snowe, Lieberman, Moynihan, Levin, 
Leahy, and Dodd who are original cosponsors of this important 
legislation. We are also pleased to have the strong support of the 
American Trucking Association which represents 9.6 million people 
employed in the American trucking industry and their families. Perhaps 
no one has felt the pain for soaring oil prices more then they.
  Today we ask the Administration to combat the unfair and 
anticompetitive practices of OPEC, and to ease the pain this cartel has 
inflicted--and will continue to inflict--on the people and businesses 
of the Northeast, the Midwest, and throughout America.
  Last fall, Senator Schumer and I began cautioning the Administration 
about OPEC's production squeeze and the impact the cartel would have on 
our economy. At that time oil prices were rising, and U.S. inventories 
were falling. Throughout the winter, Mainers, New Yorkers, and all 
Americans who heat with oil have suffered from the highest distillate 
prices in a decade. The entire nation has suffered--and will continue 
to suffer--through increased gasoline and diesel fuel costs.
  One year ago, the average retail price of a gallon of diesel fuel was 
95.6 cents. Today, prices across the nation have skyrocketed. In my 
home state, diesel costs range from $1.60 in Bangor to $1.90 in 
Biddeford.
  This jump in prices deeply harms truckers and, by extension, all 
American consumers and businesses. The trucking industry consumes 
nearly 30 billion of gallons of diesel fuel a year. At today's prices, 
that means truckers across the nation must shoulder $15 billion more in 
fuel costs this year, compared to last.
  I have heard from small Maine trucking companies that are in dire 
straits. One owner of a trucking company in Ellsworth, Maine tells me 
that, due to particularly high fuel costs, many independent truckers 
she contracts with may not be able to stay in business. She says that 
owner-operators and small trucking companies cannot withstand the 
exorbitant price of diesel fuel for much longer and warns that 
immediate action is necessary. Potato farmers in northern Maine tell me 
they are having difficulty shipping their crop to market because the 
high cost of diesel has made it economically unfeasible to come to 
Aroostock County.
  I was struck by a sign I saw on a rig two weeks ago when truckers 
converged upon Washington, demanding action from our government--it 
read: ``if you eat it, drink or wear it, it probably got to you by 
truck.'' This catchy slogan underscores the importance of trucking to 
our country and our way of life.
  But everyone shares in the pain inflicted by OPEC. Yesterday, a 
barrel of crude oil closed at $30.43, a one hundred-fifty percent 
increase from one year ago. These high crude prices hurt all 
Americans--at the pump, on the farm, in the supermarket, at the airline 
ticket counter, and at home during cold winter nights.
  OPEC member-countries have colluded to take some 6% of the world's 
supply of oil off the markets in order to maximize profits. The 
strategy's is working--although OPEC countries sold 5% less oil in 
1999, their profits were up 38%.
  OPEC's production squeeze has caused fuel reserves to shrink to 
historic lows. The Administrator of the Energy Information 
Administration--which is part of the Department of Energy--was quoted 
in The New York Times last week saying the fuel reserves in the 
Northeast were ``dangerously low,'' the lowest in 20 years, and that 
American's were ``skating on thin ice'' due to low fuel inventories. 
Indeed, we were told by the Energy Information Agency that distillate 
stocks in New England reached an all-time low last month.
  We have been disappointed that the Administration has failed to heed 
our call over the past several months. But even now, it is not too 
late. A release of oil from the SPR would have an immediate impact upon 
the price of oil and would help break OPEC's resolve to maintain an 
iron grip on our nation's supply.
  So today we offer a resolution calling upon the Administration to use 
the tools at its disposal to fight OPEC's unfair and dangerously 
harmful trade practices. I urge my colleagues to join me in supporting 
this resolution.
  Mr. SCHUMER. Mr. President, yesterday, crude prices closed just below 
$32 per barrel--the highest price since a brief spike during the 
Persian Gulf War. At this level, it is very likely that gas prices will 
reach $2 per gallon by Memorial Day.
  The price of oil has reached a point where it is no longer a 
nuisance, but a crisis for our economy. We have called on the President 
and the Secretary of Energy to release some of the Strategic Petroleum 
Reserve (SPR) in order to bring this price spike under control. And 
today, we are introducing a concurrent resolution to again request that 
the Administration use the Strategic Petroleum Reserve to bolster our 
rapidly dwindling oil inventories, stabilize prices, and to convince 
OPEC that America is ready to use leverage to protect our national 
economic interests.
  During the past two weeks, Secretary Richardson has met with OPEC 
ministers to encourage them to increase production. They discussed a 1 
million barrel per day increase, but according to experts, that will 
still not be sufficient to meet America's demand. In fact, even if OPEC 
increased production to 3 million barrels per day by the 4th Quarter of 
2000, the U.S. will still have $30 barrels next winter. This is because 
inventory levels of petroleum and petroleum products are at their 
lowest levels in more than 20 years. Gasoline inventories are down 15 
percent from last year, and crude inventories are down 13 percent. 
Organization of Economic Cooperation and Development inventories are 99 
million barrels below normal.
  Low inventories means that OPEC will continue to control global 
supply and demand. Even if OPEC increases production by a small amount, 
it will not be sufficient to prevent them from increasing prices at any 
moment. This, therefore, has become a matter of national security.
  The United States must use the SPR to prod OPEC to release 
significantly more oil. If the United States releases the reserve 
through swaps, other OPEC producers will realize that their 
stranglehold on the market is ending and will disregard their quotas, 
thereby releasing oil into market and forcing the price back down. That 
is the scenario OPEC fears the most and that is the card that we need 
to play to ensure a sufficient and timely increase in production. We 
have been warning since

[[Page S1130]]

September that this day would come if the United States did not play 
the SPR card. It is here; it is late; but it is not yet too late to 
avert a crisis. We need to use the leverage of the reserve.
  Increased oil prices could severely affect the health of our economy. 
It has the potential to increase inflation. It will drain the budgets 
of working families. The price of shipping will increase. Oil prices at 
these levels will filter through every sector of our economy like a 
virus.
  The President and Secretary Richardson must act quickly to release 
oil from the SPR in order to counter OPEC's assault on the United 
States and the global economy.

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