[Congressional Record (Bound Edition), Volume 151 (2005), Part 16]
[Senate]
[Pages 21941-21942]
[From the U.S. Government Publishing Office, www.gpo.gov]




            STRATEGIC GASOLINE AND FUEL RESERVE ACT OF 2005

  Mr. DURBIN. Mr. President, as of yesterday afternoon, nearly a 
quarter of this country's refinery capacity is offline.
  Already feeling the impact of high prices at the gas pump prior to 
the two hurricanes, Americans are bracing for additional price 
increases as refinery operations remain shutdown in the gulf coast. 
Americans are also bracing for record high energy costs this winter.
  While the administration has ordered the release of petroleum from 
the Strategic Petroleum Reserve, without refinery capacity, putting 
crude oil on the market does little to nothing to alleviate immediate 
supply constraints and high prices at pump.
  What hurricanes Katrina and Rita taught is that we must be ready for 
a rainy day. That is why it is critical to our national and economic 
interests to build a gasoline reserve to keep the country moving 
forward in case of an emergency.
  Witnessed by the ill-preparedness of the response in the wake of 
Hurricane Katrina, we must prepare now for the potential impact of 
future catastrophes.
  Most importantly, as fuel supplies remain tight, we must prepare to 
alleviate the impact that another natural disaster, refinery fire, or 
pipeline explosion has on the Nation fuel supply and as a result our 
national economy.

[[Page 21942]]

  Yesterday I introduced the Strategic Gasoline and Fuel Reserve Act of 
2005.
  The reserve would require the Department of Energy to hold and manage 
40 million barrels of unleaded gasoline and 7.5 million barrels of jet 
fuel to be used in times of supply shortages--shortages that adversely 
impact the U.S. economy.
  The Secretary is tasked with identifying at most five strategically 
significant regional locations for the fuel reserve. For instance, one 
could be located in the Northeast, one in the Midwest and one in the 
California.
  Finally, the Secretary of Energy must establish procedures to release 
fuel from the reserve to those typically engaged in the sale of 
distribution of gasoline or jet fuel.
  Hurricane Katrina forced about 1 million barrels of refined product 
offline. The reserve would provide 40 days' worth of gasoline supply 
based on the amount shutdown from Katrina--or almost 2 weeks worth of 
gasoline supply to fill the void of offline capacity caused by both 
Hurricane Rita and Katrina together.
  Furthermore, the reserve would include 7.5 million barrels of jet 
fuel--enough to keep the fleet in operation for 40 days if faced with a 
disaster of the magnitude of Katrina.
  We have witnessed three airlines enter into bankruptcy--partly 
because of increasing fuel costs. U.S. airlines pay an additional $190 
million in annual fuel costs for every penny increase in the price of a 
gallon of gas.
  It is important to keep a viable stock of jet fuel available to 
ensure the seamless operation of one of America's important 
transportation fleets.
  But, in total, consumers are the ones hardest hit by rising fuel 
costs.
  A fuel reserve like the one in this legislation could provide a price 
buffer when pipelines or refinery outages occur, helping to mitigate 
price spikes that bite consumers in the pocketbook.
  Consumer Federation of America has urged Congress to create a 
national fuel reserve. They recognize that American households who own 
and drive cars will consume 100 billion gallons of gasoline this year--
costing them over $200 billion at the pump. This represents a cost of 
nearly $2,000 for each household with a car, and an increase of nearly 
$600 a year in the past 4 years alone.
  A study commissioned by the State of California concluded that a 
regional reserve, which is what would be created under this bill, could 
save consumers $1 billion every time supplies were affected. With a 
nationwide reserve, that number is even higher.
  As Democrats continue to push for a national policy of energy 
independence, a gasoline and jet fuel reserve is an important component 
of that debate.
  I ask unanimous consent to have printed in the Record material in 
support of the bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   Support for the Strategic Gasoline and Fuel Reserve Act of 2005--
                           September 29, 2005


                     Consumer Federation of America

       Mark Cooper, Director of Research, Consumer Federation of 
     America (CFA), said about the Strategic Gasoline and Fuel 
     Reserve Act of 2005, ``Four years ago, at the first signs of 
     trouble in the gasoline market, we called for a regional 
     product reserve that would be used to not only ensure supply, 
     but to dampen the wild roller coaster ride that has been 
     afflicting the driving public. This legislation is a step in 
     the right direction and hopefully marks the start of a broad 
     re-orientation of energy policy toward policies that protect 
     consumers from pricing abuse.''


                            United Airlines

       Mark Anderson, Vice President, Government Affairs, United 
     Airlines, said, ``Senator Durbin understands that escalating 
     fuel prices, driven in part by shortages in supply, have a 
     negative impact on travel and economic stability for 
     individuals and businesses throughout Illinois and the 
     nation. This proposal, which will ensure that emergency 
     supplies of refined products like gasoline and jet fuel are 
     located at strategic locations across the country, will 
     provide economic stability when it is most needed. We applaud 
     Senator Durbin's efforts to address this issue of critical 
     importance.''


                           American Airlines

       According to Will Ris, Senior Vice President for Government 
     Affairs for American Airlines, ``the proposal of Senator 
     Durbin to establish a reserve of refined oil products is a 
     farsighted idea that should be implemented quickly. The 
     hidden story of the current crisis is that the cost of 
     refining crude oil has increased at a much more rapid rate 
     than the price of crude itself. By creating a reserve of 
     refined products, the fluxuation in the markets due to 
     temporary refining shortages can be reduced substantially. We 
     particularly applaud Senator Durbin's proposal to build 
     reserves of jet fuel as well as gasoline. This shows a strong 
     understanding of the importance of commercial aviation to the 
     economy.''

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