Democratic News

The Senate is debating H.R. 4567, the Homeland Security Appropriations bill. Sen. Robert C. Byrd tonight offered an amendment to direct the government to stop filling the Strategic Petroleum Reserve. If approved, it would save taxpayers hundreds of millions of dollars, make more oil available when markets are tight and put our nation’s limited Homeland Security dollars to work in the most beneficial way for Americans. Sen. Jeff Bingaman, top Democrat on the Energy and Natural Resources Committee, supports this amendment. Here is what he said this evening: "This amendment will make available to the market an additional 19 million barrels of oil that the Federal government will receive in fiscal year 2005 as in-kind royalties. The Federal government would have otherwise, without this amendment, held this oil off the market by putting it in the Strategic Petroleum Reserve in 2005. Because this Federal royalty oil will be sold, under this amendment, it will generate an offset of $470 million, which this amendment will use to fund important homeland security measures such as port security grants, aviation passenger screening, the Coast Guard, mass transit grants and the SAFER Program. "It is important to note that this amendment will not take out of the Strategic Petroleum Reserve any oil now in that reserve. We are merely suspending further filling of the reserve. Suspending the fill of the Strategic Petroleum Reserve during times of high oil prices makes economic sense; using Federal dollars to buy high-priced oil for the Strategic Petroleum Reserve does not make economic sense. "Oil prices hit an all time high on the NYMEX on Aug. 20, trading at $49.40/barrel, just short of $50/barrel. Today, it is trading at close to $45/barrel, which represents a price increase of more than 30 percent since the beginning of the year. "By filling the Strategic Petroleum Reserve in this high price environment, we are paying more for oil now then we would if we waited until prices went down. Filling the Strategic Petroleum Reserve when oil prices are high costs American taxpayers unnecessarily. And, it also puts more pressure on already tight fuel markets and keeps oil prices higher for longer. "The royalty-in-kind oil program used to fill the Strategic Petroleum Reserve was first envisioned in a low-price environment. The government accepted oil from domestic producers on federal lands as royalties when prices were low to absorb some of the excess oil. The RIK program was used to keep domestic oil prices from falling even further (below $14 a barrel, not $45 a barrel). The RIK program was not established to help high oil prices stay high, but buying in a high price environment has that price effect. "Suspending the fill of the Strategic Petroleum Reserve does not propose an immediate security threat. The reserve is already filled to 96 percent capacity, with 669 million barrels now stored, the highest level that we’ve ever had. It currently covers 67 days of import capacity (at a level of 10 million barrels per day of imports). Using scarce federal dollars to fill the Strategic Petroleum Reserve while failing to fund necessary homeland security measures presents a security threat itself. "Some of you may recall that we passed a similar amendment to the Budget Resolution earlier this year, the Levin-Collins amendment, which passed the Senate. I urge support of the Byrd amendment this evening. It will put our limited Homeland Security dollars to work in the most beneficial way for Americans.”

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