Republican News

WASHINGTON, D.C.– “Was the decision to call for the largest draw-down in the history of the Strategic Petroleum Reserve a proper use of the ‘exchange’ authority provided for in the Energy Policy and Conservation Act?” Chairman Frank H. Murkowski asked at a hearing today before the Senate Energy and Natural Resources Committee. He also asked the Department of Energy (DOE) if the public interest was protected during the awarding of contracts and finally if the Administration’s goal of increasing heating oil supplies will be met. His answer, first of all, is that heating oil stocks in the Northeast have actually declined since the President made his announcement to release SPR oil, and heating oil exports to Europe have increased. “This should not have been unexpected–the Administration’s logic was flawed when announced and only got worse when executed,” said the Chairman. “Refineries were operating at or above 95 % capacity, pipelines for crude and finished products were already full, and new heating oil resulting from SPR releases couldn’t be delivered until late November at the earliest. “And the execution was flawed: There was no contractual obligation that crude oil released from SPR be refined or that it not be exported. Refined product from SPR oil would hit the markets at the time exports of heating oil from the U.S. were highest. Then, literally anyone was eligible to receive oil from SPR–there were no conditions placed on bids,” said Murkowski. Because of the Administration’s need to show they were being pro-active on this issue–they failed to properly execute their own plan. Two bidders were unable to come up with the necessary letters of credit and the oil will have to be rebid. “This has caused an additional delay of nearly one month in getting nearly 1/3 of the SPR release to market,” explained the Chairman. WHAT HAVE WE GAINED? “The DOE’s Energy Information Administration has said that nearly 2/3rds of the oil released from SPR– 20 million barrels– will simply displace foreign imported oil–we will get only 10 million barrels in new crude oil from SPR,” said Murkowski. At most, that 10 million barrels of crude will yield 800-900 thousand barrels of heating oil to a nation that uses one million barrels per day. “So let’s get this straight: At a considerable risk to national security, the Administration released oil from SPR; less than a day’s worth of heating oil will result; most of the crude oil released will go to foreign markets, as will much of the heating oil; and the only folks who will benefit will be a few large oil companies and a few speculators who hit the jackpot; and maybe Al Gore. But not the fuel-starved consumers in the Northeast! Clearly the Vice President isn’t relying on heating oil to keep warm this winter–otherwise the Administration might have moved faster and taken real action to protect consumers–not to protect its candidates.” #####