Tuesday, April 29, 2008                                 

Contact: Andrea Wuebker/Laena Fallon (GREGG)

Barbara Riley/Liz Chamberlain (SUNUNU)

GREGG AND SUNUNU URGE PRESIDENT TO HALT DEPOSITS INTO STRATEGIC PETROLEUM RESERVES IN AN EFFORT TO EASE HIGH GAS PRICES

            WASHINGTON - U.S. Senators Judd Gregg and John Sununu (R-NH) today joined their colleagues in the Senate in writing to President Bush to request that the Department of Energy temporarily stop deposits of domestic crude oil into the U.S. Strategic Petroleum Reserves (SPR) in an effort to ease record high gas prices.

In addition to Senators Gregg and Sununu, the letter was also signed by Senators Jon Kyl (R-AZ), John Ensign (R-NV), John Barrasso (R-WY), Kit Bond (R-MO), Sam Brownback (R-KS), Saxby Chambliss (R-GA), Susan Collins (R-ME), John Cornyn (R-TX), Elizabeth Dole (R-NC), Orrin Hatch (R-UT), Lisa Murkowski (R-AL), Jeff Sessions (R-AL), and Ted Stevens (R-AK). The full text is included below.

            Senator Gregg stated, “At a time when drivers in the Granite State are facing record gas prices of over $3.50 per gallon, and oil companies continue to post record profits, it is critical that we take action to try to ease the pain at the pump for consumers.  Although it’s just a small step in the right direction, temporarily halting deposits into SPR will help signal to the markets that the United States is serious about bringing down gas prices.  As we head into the busy summer driving season, I will continue to work with my Senate colleagues to advance energy policies which benefit consumers’ checkbooks while also protecting the environment.”

            Senator Sununu stated, “It makes no sense for the Federal Government to be adding to its record reserves when oil prices are $120 per barrel. Stopping these purchases would relieve some pressure on both global demand and the price at the pump. At the same time, Congress should roll back the federal gas tax for the coming summer months, when families take to the roads and airways for vacation. While these efforts would relieve the growing pressure on consumers, Congress must continue to work to reduce dependence on foreign oil and encourage development in advanced alternative energy.”

Text of the letter:

April 29, 2008

The Honorable George W. Bush

President of the United States

Washington, D.C. 20500

Dear President Bush:

We write today to request that the U.S. Department of Energy (DoE) immediately halt deposits of domestic crude oil into the U.S. Strategic Petroleum Reserve (SPR).  As we enter the busiest driving season of the year, the price of a barrel of West Texas Intermediate crude oil hovers around a record $120.

The SPR was established in 1975 to provide a supply of crude oil during times of severe supply disruptions.  Today, the SPR contains more than 701 million barrels of oil, exceeding our International Energy Program commitments to maintain at least 90 days of oil stocks in reserve. 

High energy prices are having a ripple effect throughout the U.S. economy and exacerbating recessionary pressures.  The Energy Information Agency reports that supplies and inventories of crude oil and refined products are above 2007 inventories while our demand for gasoline is down.  Yet, the price of crude oil has skyrocketed 100% from last year’s levels which were just above $63 a barrel in April, 2007.  Despite these economic realities, the DoE recently solicited contracts to exchange up to 13 million barrels of royalty oil from Federal leases in the Gulf of Mexico for deposits in the SPR.

Some analysts blame geopolitical instability and disruption in production for the rapid price increases; however, these factors alone do not explain the extraordinary increase in oil prices compared to previous years, when these same challenges were present.  Temporarily halting deposits to the reserve can provide some relief because the increased supply of oil available for refinement will send the right signal to all markets that the U.S. Government will take measures necessary to address exorbitant crude oil prices that negatively affect the global economy.  We believe, in light of the dramatic increase in oil prices, a temporary halt to deposits into the SPR should be considered until the economy stabilizes.