Letter to Bush Admin, Time to Buy Oil for Strategic Reserves

FOR IMMEDIATE RELEASE

Contact: Select Committee, 202-225-4081

Markey: Bush Administration New Year's Resolution Should Be to Buy Oil for Reserves

WASHINGTON (December 30, 2008) - Representative Edward J. Markey (D-Mass.) and other lawmakers today called upon the D.O.E. to resume buying oil for America's countrywide oil reserves, calling it the prudent response to lower oil prices, just as stopping the fill of the reserves was a prudent response when oil rose above $100 per barrel. Representative Markey, along with Reps. Peter Welch (D-Vt.) and John Yarmuth (D-Ky.), were principal authors of the bill that forced the Bush administration to stop filling the reserves in May of 2008.

"At current prices, a smart New Year's resolution for the Bush administration is to start buying oil again for our countrywide reserves," said Representative Markey, who is Chairman of the Select Committee on Energy Independence and Global Warming. "Just as it was prudent to stop buying oil at record high prices, we should continue to fill the reserves now that prices have plummeted. That's sensible fiscal policy, plain and simple."

The letter, sent by Reps. Markey and Welch to D.O.E. Secretary Samuel Bodman, explains that while the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008 (P.L. 110-232), which was enacted into law on May 19, 2008, mandated that the Department suspend filling the SPR through December 31, 2008, lower prices now dictate a need to start buying oil once again. The legislation said that oil could be purchased again when average prices dipped below $75 per barrel for 90 consecutive days. However, because oil has declined so precipitously-by in excess of $100 since the high of $147 this summer- the letter says "once again entering into contracts to fill the SPR would appear to be financially prudent for the Department, and consistent with Congressional goals for this program."

The letter notes the recommendation of the Government Accountability Office (GAO) that the Department seek to "acquire more oil [to fill the SPR] when prices are low and less when prices are high." GAO has estimated that had the D.O.E. filled the SPR using a constant dollar value rather than a constant volume between 2001 and 2005 it could have reduced costs to taxpayers by in excess of ten percent, saving approximately $590 million.

To download a PDF of the letter, please CLICK HERE.

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