Lawmakers want to end oil shipments to US reserve

[wmenorr67]

 

WASHINGTON (AP) - Amid daily bipartisan sniping over high gas prices, Democrats and Republicans appear to agree on at least one thing: With oil over $120 a barrel, President Bush ought to stop buying crude for the government emergency reserve.
Both the House and Senate are expected to approve, with bipartisan support, legislation Tuesday directing Bush to temporarily halt the shipment of about 70,000 barrels of oil a day to the Strategic Petroleum Reserve.

Bush has refused to do so, arguing that this small amount of oil won't impact prices and that for security reasons he wants to increase the stockpile to its full capacity of 726 million barrels. It now has about 701 million barrels, equal to nearly two months of oil imports.

Lawmakers' search for a response to high gasoline and oil prices comes as Bush is preparing later this week to travel to Saudi Arabia where he is expected to try to convince the Saudis to increase oil production. So far, Saudi Arabia and other OPEC countries have refused to do so, arguing the high price of oil stems from other factors than a shortage of supply.

Senate Majority Leader Harry Reid, D-Nev., plans to bring up for a vote Tuesday a provision to halt oil shipments to the federal reserve until the end of the year. Senate Republicans said they want shipments halted for six months, but are expected to support the Democratic measure.

The House is taking up a similar provision later in the day that also is expected to get broad support.

By all accounts, the president is standing firm.

"Our position hasn't changed," said White House press secretary Dana Perino on Monday.

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 puta tenth of one percent of global production"would have a negligible impact on gas prices" if put into the market.

The government obtains the oil in lieu of royalties that otherwise would be paid by producers who pump it from federal land. If shipments were halted, the oil would flow into the open market.

Many Democrats and Republicans in Congress say it doesn't make sense for the government to essentially purchase oil for a reserve 97 percent full when crude is costing more than $120 a barrel.

"I think it's nuts," said Sen. Byron Dorgan, D-N.D. "It makes no sense at all. It increases gas and oil prices."

Sen. Pete Domenici of New Mexico, the top Republican on the Energy and Natural Resources Committee, said that "it's clear that many Republicans and Democrats agree that given the high price of gasoline it would be wise to suspend shipments to the SPR for the time being."

How much such a move would influence pricesif at allis unclear.

"Taking barrels of oil off the market to put in the reserve puts upward pressure on markets," Frank Rusco, acting director of the Government Accountability Office, the Congress' investigative arm, told a hearing recently. Some lawmakers believe such a move could send a signal to oil markets and tone down speculation.

"We don't think it would have a big enough impact on prices for anybody to really notice," said Perino, when asked about the push in Congress to force the president to halt the shipments.

http://www.breitbart.com/article.php?id=D90KKSL00&show_article=1&catnum=-1

When are people going to pull their heads from their fourth point of contact and realize if you want to have an effect on gas prices we need more supply?  We have all the oil we need.  Does no good to have 1000 barrels of oil if you can only refine 800 barrels.

 

[LAK]

It's not so much more supply, as a dollar that buys more oil. Not having a full national reserve though is insanity.

[SteveS]

When are people going to pull their heads from their fourth point of contact and realize if you want to have an effect on gas prices we need more supply?  We have all the oil we need.  Does no good to have 1000 barrels of oil if you can only refine 800 barrels.

I disagree somewhat.  How is our low refining capacity driving up the price of crude?  It would seem that high demand from the US and increasing demand from China has some influence on the price.

[wmenorr67]

I never said that.  I said that the lack of refinery space drove up the price of gas.  Re-read my comments.

Does no good to have 1000 barrels of oil if you can only refine 800 barrels.

[Waitone]

We already have a really big national reserve.  Actually two of them.  They are named ANWR and Gull Island.  Problem is previous agreements with our best friends the Saudis will keep us from drilling and then refining. 

[Ben]

Interesting that they want to do this "given the high price of gasoline" yet balk at temporarily eliminating or reducing taxes at the pump (and I won't even get into refineries and drilling).

I do agree from the economic side, that you want to buy low, sell high. We could probably do with reducing reserve purchases until the price settles down. And yeah, ANWR is a natural reserve for us. And failing that, why can't we park an oil rig right next to the Chinese ones 100 miles off Florida?

[Sergeant Bob]

Nothing but a ploy by the Dem's to make Bush look bad. It's what they do....

[wmenorr67]

The federal tax on a gallon of gas is only 18 cents.  Wow that will be a lot of help---sarcasm off.

It is not the governments job to regulate the cost of goods and services.  If that is the case then in my opinion the cost of new cars is way too much and the government needs to make the auto industry sell them cheaper.

[Ben]

The federal tax on a gallon of gas is only 18 cents.  Wow that will be a lot of help---sarcasm off.

Mostly my point was that politicians don't like to consider stuff that takes money out of their tax pockets.

[LAK]

Waitone

We already have a really big national reserve.  Actually two of them.  They are named ANWR and Gull Island.  Problem is previous agreements with our best friends the Saudis will keep us from drilling and then refining.

Very true too; the reserves at the capped Gull Island pool alone are enormous.

[wmenorr67]

The federal tax on a gallon of gas is only 18 cents.  Wow that will be a lot of help---sarcasm off.

Mostly my point was that politicians don't like to consider stuff that takes money out of their tax pockets.

True but that money is supposed to be earmarked to go and help the upkeep and building of new roads.

 

[Ben]

And on a related note, drilling and refinery building are blocked once again:

------------------------
http://www.theledger.com/article/20080514/NEWS/9469497/1039

Senate Blocks Oil Drilling Proposal
Bill would have allowed states to petition to drill off the Atlantic, Pacific coasts.
By KIRSTEN B. MITCHELL
LEDGER WASHINGTON BUREAU

WASHINGTON | Senate Democrats and a handful of Republicans from coastal states beat back a proposal Tuesday seeking to erode the ban on oil and gas drilling in Atlantic and Pacific waters.

The measure, which did not affect the Gulf of Mexico, would have allowed the governors of the nation's 22 continental coastal states, including Alaska, to petition the federal government for permission to drill on the Outer Continental Shelf, the sloping area just beyond the beach.

Sen. Mel Martinez was among five Republicans from coastal states who voted against the measure, which failed on a 42-56 vote. Sen. Bill Nelson, D-Fla., also voted against the proposal.

Other coastal state Republicans who helped sink the plan were Sen. Elizabeth Dole, R-N.C., Sen. Susan Collins, R-Maine, Sen. Olympia Snowe, R-Maine, and Sen. Gordon Smith, R-Ore.

The oil drilling measure was part of a Republican energy plan that also would
have opened 2,000 acres of the Arctic National Wildlife Refuse in Alaska to oil and gas leasing, provided incentives for building refineries and
battery-powered vehicles, and allowed oil and shale drilling in the West.

Republicans attempted to tack the plan onto unrelated legislation on federal flood insurance, which the Senate later passed. During the debate, Martinez rejected efforts to use the flood program to expand oil drilling and natural gas leasing in the Outer Continental Shelf (OCS) off the Atlantic Coast of Florida.

Democratic presidential candidates, Sens. Hillary Clinton of New York and Barack Obama of Illinois, voted against the measure. Sen. John McCain, the presumptive Republican presidential nominee did not vote on the measure Tuesday.

[Manedwolf]

China has rigs 100 miles off our coast, with a wellhead down there vacuuming up oil that we should be using. It's like someone leaning over the table and sticking a straw in your milkshake and drinking it.

And we are not allowed to put our own straw in and beat them to it.

[wmenorr67]

And yet the government should do something.

[WeedWhacker]

Interesting that they want to do this "given the high price of gasoline" yet balk at temporarily eliminating or reducing taxes at the pump (and I won't even get into refineries and drilling).

I only balk at plans, such as Hillary's insane notion, which axe the fed gas tax from the pump... and place it on the oil companies instead. Net effect: zero, plus overhead costs.

I'm also naive enough to think that the taxes on gas are used to maintain roadways, which I have a hard time arguing against as long as the idealistic notion holds true.

[AZRedhawk44]

Forgive me for being applying the obvious (but potentially incorrect) assumption that:

US Coastal sovereignty stops 12 miles off-shore, right?

Making that international waters, outside of US jurisdiction (and any state as well)?

Couldn't I just tap my own financial reservoirs and settle a 50 million dollar oil rig 13 miles off-shore and thumb my nose at California?

The Chinese obviously did so, out in the Atlantic near Florida...

[WeedWhacker]

Forgive me for being applying the obvious (but potentially incorrect) assumption that:

US Coastal sovereignty stops 12 miles off-shore, right?

Making that international waters, outside of US jurisdiction (and any state as well)?

Couldn't I just tap my own financial reservoirs and settle a 50 million dollar oil rig 13 miles off-shore and thumb my nose at California?

The Chinese obviously did so, out in the Atlantic near Florida...

Some folks did something along those lines off the coast of England. They called their little private country "Sealand". They were also invaded by some people with machine guns, as I recall.

Pirates are probably a bit more leery of pissing off China than you or I.

[AZRedhawk44]

Some folks did something along those lines off the coast of England. They called their little private country "Sealand". They were also invaded by some people with machine guns, as I recall.

So, in order to increase the pirate population and thereby stop global warming in its tracks, all we have to do is provide deceptively vulnerable booty on the high seas?

I'd put a Ma Deuce on each corner of the platform and issue M14's to all workers.  I'd even sow the water with baby seal chum so sharks would circle for target practice for my workers!

We'd create pirates out of thin air (perhaps pirates are a by-product of excess heat?) and cool the earth.  No more buying trees in Kenya! 

Shoot a pirate and save the Earth!