US House members put pressure on Bush to halt SPR deliveries

Washington (Platts)--22Mar2004

The US Congress intensified the pressure on President Bush to use the US Strategic Petroleum Reserve to lower prices Monday when a group of 53 members of the US House of Representatives--Democrats and Republicans--asked him to suspend scheduled deliveries into the emergency crude stockpile. The US Senate last week approved a non-binding amendment to the fiscal year 2005 budget resolution that would require the Department of Energy to cancel the scheduled delivery of 53-mil bbl of crude to the SPR. The letter by House lawmakers, including the conservative House Resource subcommittee chairman Barbara Cubin (Republican-Wyoming), indicates bi-cameral, bi-partisan support for the measure. "We are urging you to call upon the Department of Energy to review and to revert back to its previous policy of filling SPR when crude oil prices are relatively low and deferring oil deliveries when prices are relatively high," the House members wrote in the letter to Bush. "Filling the SPR, without regard to crude oil prices and the availability of supplies drives oil prices higher and ultimately hurts consumers," the lawmakers wrote, adding that "we hear from our constituencies daily about the financial strain of increasing gasoline prices." The Bush administration has continued to move forward with its plans to boost the volume of oil in the SPR to its full 700,000 b/d capacity. If the delivery schedule remains on track the reserve, which held 645.5-mil b/d as of Monday, will be filled early next year. Critics say that by continuing to fill SPR the administration is taking desperately needed crude off an already tight market, causing prices to increase. The administration retorts that the volumes are a tiny fraction of US demand and have little effect on prices. Last winter, during a Venezuelan workers strike that all but cut off exports from Caracas, DOE deferred scheduled deliveries into the SPR. It has denied similar requests this year, saying there is no supply emergency to warrant such a move.