Senate says halt oil reserve shipments

Discussion in 'Wall St. News' started by sttrader, May 13, 2008.

  1. WASHINGTON - The Senate, in a direct challenge to President Bush, voted Tuesday to temporarily halt the shipment of thousands of barrels of oil a day into the government's emergency reserve.

    Both Democrats and Republicans said such shipments make no sense when oil is costing more than $120 a barrel and could better be used to add supplies to a tight market and possibly lower prices.

    "We are buying the most expensive crude oil in the history of the world and storing it," said Sen. Byron Dorgan, D-N.D. "When American consumers are burning at the stake by high energy prices, the government ought not be carrying the wood."

    Until both chambers of Congress pass the emergency reserve directive and Bush signs it — or Congress enacts it over a presidential veto — the legislation has no force of law. But the Senate's message to the president Tuesday was a strong one.

    With Republicans joining Democrats, senators voted 97-1 to suspend the shipments — averaging about 70,000 barrels a day — until the end of the year. Only Sen. Wayne Allard, R-Colo., voted against the measure.

    The House was scheduled to vote on a similar directive later in the day. The Senate measure was added to legislation on flood insurance that passed shortly after the oil reserve vote.

    Bush has been steadfast in continuing shipments of oil to the Strategic Petroleum Reserve, a system of underground salt domes on the Gulf Coast, arguing that the stockpile should be filled to its maximum capacity of 727 million barrels. It currently is 97 percent full at 701 million barrels, equal to two months of oil imports.

    The reserve was created in the 1970s as a precaution against major interruptions of oil supplies.

    Senators said the stockpile is big enough to meet any emergency.

    Dorgan acknowledged that Tuesday's vote was "a small step forward" as Congress grapples with ways to respond to soaring fuel prices that have pushed gasoline prices to nearly $4 a gallon after a winter of record heating bills.

    It's uncertain how much effect — if any — putting 70,000 barrels a day of crude onto the U.S. market that uses more than 21 million barrels a day would have. Dorgan said it could send a signal and curb market speculation.

    "It could have a chance of reducing the price a small amount," said Sen. Pete Domenici, R-N.M., who joined the chorus against continuing the shipments. "But make no bones about it, this is no big energy policy. This is one little thing we can do."

    Earlier, the Senate rejected a broader Republican energy plan that called for opening an Alaska wildlife refuge and some offshore waters to oil development. Supporters of the measure couldn't get the needed 60 votes to overcome a Democratic-led filibuster threat.

    Republican leader Mitch McConnell of Kentucky said more domestic oil production is needed to keep prices in check and to reduce U.S. dependence on oil imports. "We cannot repeal the law of supply and demand....We need to increase supply in order to lower gas prices," said McConnell.

    But opponents said areas such as the Arctic National Wildlife Refuge and coastal waters that have been off limits to drilling for 25 years ought to remain that out of bounds to oil companies. The GOP measure, defeated Tuesday by a vote of 56-42, would have allowed coastal states to get a waiver to the offshore drilling ban.

    "We can't drill our way to lower prices," said Sen. Richard Durbin, D-Ill.

    The president has given no indication that he will move to halt shipments to the oil reserve, short of a congressional directive.

    "Our position hasn't changed," said White House press secretary Dana Perino earlier this week. She said the president believes the emergency reserve needs to be increased "in order to protect ourselves against oil shocks" and that the oil being put in — a tenth of one percent of global production — "would have a negligible impact on gas prices" if put into the market.

    Democratic Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York, interrupting their presidential campaigns, voted to halt the oil reserve deliveries. Sen. John McCain, the presumptive GOP presidential nominee, was not present for the vote.

    By H. JOSEF HEBERT, Associated Press Writer
  2. TGregg


    OK, it's math time, boys and girls. Let's run some numbers and see what a great thing government is and examine a concept called "Style over Substance".
    That's 700 million over 60 days or about 11.7 million barrels a day.
    That's less than 0.6% of the oil we use.

    To put this in easy to understand terms, imagine you run a lemonade stand. Business is brisk, and you crank through an average of 100 lemons a day. Somebody steps up to you and says "I'm from the government and I'm here to help." Then he hands you half a lemon. "Please vote for me in Novemeber now that I've helped you cut costs" he says with a straight face.
  3. RhinoGG

    RhinoGG Guest

    perception is reality
  4. What political grandstanding. We're going to stop now that it's 97% full anyway?