[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;
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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
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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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