Lawmakers want to limit oil reserves
Only gasoline prices nearing $4 a gallon could accomplish this political feat: bringing together congressional Democrats and Republicans to support a halt to oil deliveries for the nation’s Strategic Petroleum Reserve.
With fuel costs becoming a crucial election-year issue, members of both parties -- separately -- pitched their ideas Wednesday for bringing down prices.
Democrats called for a windfall profits tax on oil companies, rolling back tax breaks for the industry and new protections against price-gouging, while Republicans urged increased exploration for new domestic oil sources. About the only proposal their plans had in common was to stop the delivery of 70,000 barrels of oil a day for the emergency stockpile.
President Bush has resisted suspending deliveries, contending it would weaken the nation’s defenses against an interruption in the flow of foreign oil. The reserve, set up after the 1973 Arab oil embargo, holds about 700 million barrels in salt caverns along the Gulf Coast.
Bush also has asserted that halting deliveries would do little to bring oil prices down. After all, 70,000 barrels represents a small fraction of the 20 million the nation uses every day.
Energy Secretary Samuel Bodman, in a recent letter to lawmakers, said that in light of “significant risks in the oil market from geopolitical instabilities among some producing countries, terrorist threats to production globally, and natural disasters like Hurricanes Katrina and Rita that can seriously disrupt supply to our country . . . the United States must look to strengthen our energy insurance policy, not weaken it.”
But Democrats said the suspension would put more oil on the market and save motorists about 2 cents to 5 cents a gallon. In a letter to Bush on Wednesday, nearly 100 House members said that deferring deliveries or releasing oil from the reserve could also curb speculation in oil markets.
An increasing number of Republicans have joined Democrats to back a halt to oil deliveries, noting that gas prices have never been this high.
“There are few actions that can be taken that will have a near-term impact on the price of oil and gasoline,” Sen. Charles E. Grassley (R-Iowa) said in a letter this week to Bush. “However, halting the deposits of crude oil in the [Strategic Petroleum Reserve] is a small but positive step that can increase the supply of crude oil in the market, and hopefully reduce the price at the pump.”
Sen. Byron L. Dorgan (D-N.D.) said he would try to add a measure that would suspend the oil deliveries to a war-funding bill. “I think it’s nuts, at $120 a barrel for oil, to put up to 70,000 barrels a day underground,” he said Wednesday.
Otherwise, in a day of political maneuvering over gas prices, the parties agreed on little else.
Democrats unveiled a package that would impose a windfall profits tax on oil companies and roll back industry tax breaks to raise money to promote cleaner energy sources and energy-efficient technology. They also proposed regulation aimed at cracking down on speculation in oil markets.
Notably missing from the bill is a summer moratorium on the federal gas tax that has become a hot issue in the presidential campaign. Sen. John McCain (R-Ariz.) and Sen. Hillary Rodham Clinton (D-N.Y.) support the idea; Sen. Barack Obama (D-Ill.) opposes it.
Republicans moved swiftly to attach their own proposals, heavily tilted toward promoting domestic production of oil, to a bill before the Senate. Their proposals include opening the Arctic National Wildlife Refuge to energy exploration and relaxing the long-standing ban on new drilling off the East and West Coasts.
Most of the parties’ proposals are not new and have failed to pass before.
But legislation isn’t their only goal. Lawmakers want to show they are sympathetic to public anger over high prices, and are using their energy proposals to highlight differences between the parties before the fall election.
“The Democrats’ plan to reduce gas prices is running on empty,” said Sen. Pete V. Domenici of New Mexico, the top Republican on the Senate Energy and Natural Resources Committee. “Americans don’t need more taxes and more investigations; they need more oil and lower prices.”
Senate Majority Leader Harry Reid (D-Nev.) responded: “Bush Republicans’ only answer” is to drill in the Arctic National Wildlife Refuge. “We cannot produce our way out of the problems that we have.”
Democrats hope to bring up their proposals for a vote in the Senate before the Memorial Day recess.