Republican News

WASHINGTON, D.C.– Chairman Frank H. Murkowski today chastised the Administration for its lack of business sense in not assuring that heating fuel distilled from Strategic Petroleum Reserve oil remain in this country. “It is inconceivable to me that the Department of Energy did not have the good sense to require any bids and resulting contracts for the SPR oil be designated and specifically held for placement into the Northeast, where it is most needed,” said the Chairman. “It becomes more and more obvious that this entire idea was ill conceived and a desperate ploy to take attention off the energy crisis before the election.” Murkowski quoted an article in The Wall Street Journal today entitled: Europe’s Low Oil Supplies May Blunt U.S. Effort. “Europe’s market for heating oil is 50% bigger than the U.S. heating oil market, Europe’s stocks are even tighter and prices there are a few cents a gallon higher, so U.S. refiners have a renewed incentive to ship heating oil across the Atlantic.” And, “U.S. exports of heating oil to Europe have ballooned nearly six times in the first seven months of this year to about 1.4 million barrels, compared with the year-earlier period, according to the most recent figures of the Department of Energy’s Energy Information Administration.” The Chairman said he was not surprised at this development that may send heating oil abroad. “It is the normal function of a market–product chases price. But we should not be portraying this as a ‘fix’ for low inventories of heating oil in the Northeast.” The Oil Price Information Service (OPIS) today reported, “The ‘window’ to ship U.S. distillate to European markets has opened wide this week, and cargo traders have seized the opportunity to move Gulf Coast-manufactured No. 2 oil to offshore markets.” The story continued, “Exactly how many cargoes have been put together for export isn’t known, but sources believe that some mid-October days may see more than 200,000 b/d depart for offshore destinations. “‘It would seem to me that the arbitrage door is open to Europe for U.S. quality diesel fuel, and it is a wide margin right now,’ a trader told OPIS.” Murkowski recalled testimony by Secretary of Energy Bill Richardson at an Energy and Natural Resources Committee hearing last week on winter fuels. “I asked the Secretary point blank if it is possible as a result of oil being released from SPR that prices could fall but no new heating oil would find its way into the U.S. market. His answer was ‘maybe.’” “The irony that we are going to release oil from our Strategic Petroleum Reserve to provide product to a European market should not be lost on the American consumer,” said the Chairman. “The real tragedy in this is the fact that we have weakened our ability to respond to a real supply disruption that could be brewing in the Middle East.” ###