Republican News

WASHINGTON, D.C. - Concerned about the possibility that oil released from the Strategic Petroleum Reserve (SPR) will not make it to the Northeastern U.S., Senate Energy Committee Chairman Frank H. Murkowski today sent a letter to Energy Secretary Bill Richardson. The letter requests that the Department of Energy provide specific information regarding the proposed exchange of oil from the Strategic Petroleum Reserve. Murkowski has consistently questioned the Administration’s decision to swap oil from the Strategic Petroleum Reserve. He says refineries are already running at 95 percent of their production capacity. This leaves little room for the SPR oil to be refined into home heating oil. The proposed swap also goes against the purpose of the SPR. The Reserve was established to provide oil to the Nation in the case of a severe supply disruption, not to lower market prices when politics demand. The Chairman questioned the Department of Energy’s business sense in not requiring the oil to be refined here in the U.S. and to stay in the U.S. The Department of Energy now expects that two thirds of the oil taken from the SPR will go overseas. “We are releasing our energy for other countries when we need it most,” said Murkowski. “If the stated purpose for the swap was to supply the Northeast with home- heating oil, why wasn’t there a contractual obligation that made sure it will get there?” The latest controversy surrounding the SPR swap now revolves around the bidding process for the oil. After the eleven winning bids were announced, it was reported that several of the winners had no experience refining oil or even getting products to market. The letter requests the following information from the Department of Energy: A list of bidders for the SPR oil; For each bidder, the date on which their bid was submitted, the amount of SPR oil they bid for and the bid they made; For each winning bidder, the amount and type of SPR oil they were awarded and the terms of the award; For each winning bidder, the assurance they provided that they will be able to return the oil to the SPR as required; Why DOE did not have any financial qualification for bidders; For each losing bidder, why its bid was not accepted; A list of all persons who the Department contacted to inform them of the proposed exchange, and the means by which such persons were contacted; Provisions in the contracts that require heating oil to be refined from the SPR oil; Provisions in the contracts that require heating oil refined from the SPR oil to be delivered to the Northeast market; Provisions in the contracts that prohibit the export of the SPR oil or petroleum product refined from the SPR oil, including export by exchange. ###