Kind Proposal to Halt Purchases for Strategic Petroleum Reserve Endorsed by All Three Presidential Candidates
Washington, D.C. –– All three candidates for President have endorsed a strategy to bring down gas prices by temporarily halting new purchases for the Strategic Petroleum Reserve (SPR), a proposal Rep. Kind started calling on the Bush Administration to do in January. In letters to President Bush on January 22, Kind called on President Bush to take action on record oil prices (now over $100 per barrel) by looking to the Reserve to ease demand for oil and save taxpayer money. Senators Obama and Clinton are cosponsors of a Senate bill that would halt new purchases for the SPR, and Senator John McCain endorsed the proposal while speaking yesterday in New York (McCain Seeks Smaller Oil Reserve, Wall Street Journal, 4/11/08, https://online.wsj.com/article/SB120786930632206383.html).
“Record-high oil prices are hurting farmers, manufacturers, and middle-class families in Wisconsin and across the country,” Rep. Kind said. “I am pleased that all three Presidential candidates have endorsed this proposal and I again urge the President to act on this issue. It is something that he can do right now to provide real relief to American families and businesses as temporarily halting new purchases for the SPR could lower gas prices by as much as 25 cents per gallon of gasoline.”
The Strategic Petroleum Reserve (SPR) is the United States' emergency oil stockpile, created in 1975 after oil supplies were cut off during the 1973-74 oil embargo. The SPR is currently 95 percent full. Despite record-high oil prices, the Bush Administration has continued to fill the SPR, diverting 70,000 gallons of oil from the market every day, pushing up costs. Temporarily ceasing new purchases of crude oil for the SPR could drive down oil prices by as much as $6 per barrel, or $.25 per gallon of gas, according to a noted petroleum economist. Furthermore, selling the oil on the market instead of putting it in the SPR would raise $6 million a day for the federal government, or more than $1 billion over the next six months.
The Administration has taken this action in the past to relieve supply issues and lower gas prices, most recently in 2005 after Hurricanes Katrina and Rita disrupted refineries in the Gulf Coast. Following the hurricanes, oil prices surged to nearly $70 a barrel, not even close to the $110+ a barrel seen recently.
“With the SPR 95 percent full, it makes no sense to continue to fill it with high priced oil – driving up costs and wasting taxpayer dollars,” Rep. Kind said. “This commonsense action could do a lot to stimulate our economy; the Congressional Budget Office estimates that for every $10 reduction in the price of oil, $50 billion is injected into the market. I hope the Presidential candidates will continue to talk about this issue throughout the campaign, and will join me in urging President Bush to take this action immediately.”