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“URGING SECRETARY OF ENERGY TO FILL STRATEGIC PETROLEUM RESERVE” mentioning the U.S. Dept. of Energy was published in the House of Representatives section on pages H6431-H6433 on Oct. 9, 2001.
The publication is reproduced in full below:
URGING SECRETARY OF ENERGY TO FILL STRATEGIC PETROLEUM RESERVE
Mr. BARTON of Texas. Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 250) urging the Secretary of Energy to fill the Strategic Petroleum Reserve, as amended.
The Clerk read as follows:
H. Res. 250
Whereas the United States is engaged in military activity as a result of the terrorist attacks of September 11, 2001;
Whereas such acts continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States, including the security of important energy supplies;
Whereas our Nation imports more than half of the crude oil it consumes from other nations;
Whereas Congress found in the Energy Policy and Conservation Act that the storage of substantial quantities of petroleum products will diminish the vulnerability of the United States to the effects of a severe energy supply interruption, and provide limited protection from the short-term consequences of interruptions in supplies of petroleum products;
Whereas a severe energy supply interruption would have an adverse impact upon American consumers and the economy;
Whereas the Strategic Petroleum Reserve has an authorized capacity of 1,000,000,000 barrels of crude oil, a current storage capacity of 700,000,000 barrels of crude oil, and approximately 545,000,000 barrels of crude oil currently in storage; and
Whereas marginal wells in the United States provide an important base of domestic crude oil production, make an important contribution to our workforce and economy, are particularly sensitive to price fluctuations, and are difficult and costly to reopen: Now, therefore, be it
Resolved, That the House of Representatives urges the Secretary of Energy to increase the capacity of the Strategic Petroleum Reserve to 1,000,000,000 barrels of crude oil, to fill the Strategic Petroleum Reserve to its capacity as soon as practicable, and to consider purchasing from marginal wells that would otherwise cease production, consistent with current law.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Texas (Mr. Barton) and the gentleman from Maine (Mr. Baldacci) each will control 20 minutes.
The Chair recognizes the gentleman from Texas (Mr. Barton).
General Leave
Mr. BARTON of Texas. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and to include extraneous material on the resolution, H. Res. 250, as amended.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Texas?
There was no objection.
Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today the House is going to consider a very important resolution dealing with our energy security. This is a bipartisan effort; and I would like to publicly thank the ranking member of the subcommittee that I chair, the gentleman from Virginia (Mr. Boucher), the full committee ranking member, the gentleman from Michigan (Mr. Dingell), and of course the full committee chairman, the gentleman from Louisiana (Mr. Tauzin), for their excellent support on this resolution.
This is a nonbinding resolution, so it does not require the Secretary of Energy and the President of the United States to move to fill the Strategic Petroleum Reserve; but it is my intent and my hope, and in working with the administration officials the last several weeks, that we will begin to do that.
The Strategic Petroleum Reserve is an important national asset. It was created in the 1970s, after the last Arab oil embargo that was imposed on the United States and the Western democracies by OPEC, the Organization of Petroleum Exporting Countries. We made a decision as a Nation to begin to stockpile oil so that never again would our economy be held hostage to oil imports. Since that time, we have accumulated as much as 600 million barrels of oil in the reserve. Today, we have approximately 545 million barrels.
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These reserves are in four sites on the Gulf Coast, two in Texas and two in Louisiana, and each of them has somewhere between 80 and 160 million barrels of oil.
The reserve is authorized to have a capacity of 1 billion barrels. It does not have that capacity in place. It has capacity to actually store about 700 million. As I said earlier, there are 545 million barrels currently in the reserve.
We import about 12 million barrels a day. Some of that oil comes from nations that are not friendly to the United States of America; Iraq is a nation that comes to mind. There is a distinct possibility in the next several months as the President pursues terrorists and those that harbor them, we may need to take military action against some of these nations that we are receiving oil imports from, so it would behoove us to have in place the ability to use this reserve and to begin filling the reserve to its full capacity.
We could put approximately 155 million barrels of oil in the capacity that we have. The negotiations and the work that we are doing right now with DOE officials and Bush administration officials would be to take oil in kind from the Federal OCS. We could receive approximately 170,000 barrels per day and put that oil into the reserve. There would be no out-of-pocket cost to the U.S. Treasury if we did that; and in doing that kind of swap, we should be able to get to 700 million barrels without any extraneous expense.
If we want to go to the 1 billion barrels, if the reserve is authorized, we will need to appropriate funds to build additional capacity, and we may need to appropriate funds to purchase oil.
Mr. Speaker, the resolution before us indicates if we need to purchase oil we give preference to marginal wells or stripper wells, as they are called in the Southwest. These are wells that produce less than 10 barrels a day.
The last time we had an oil price collapse several years ago, we lost between 500,000 and 1 million barrels of stripper well production that will never come back.
This resolution would encourage the Secretary of Energy to give preference to marginal well purchases. It is authorized by law that we purchase marginal well domestic oil. This would give preference to those purchases.
We think if we could purchase some of this oil, we could buy it at a very inexpensive price. The acquisition cost in the reserve today is about $27 a barrel. The world oil market price is around $20 a barrel. When stripper well prices fall below $15 or $16 a barrel, they begin to be shut down. If we subtract the royalty and the taxes that they are paying, the severance taxes, stripper well prices are already at that
$15 a barrel price. It is not demanded by this resolution that we purchase oil for the reserve from marginal wells, but it is given a preference.
Mr. Speaker, I feel very strongly that it is in our national interest to have the Strategic Petroleum Reserve in a state of readiness. I can state to the Congress, I toured one of the sites at Big Hill down by Beaumont, Texas last week. Their security was excellent. Their operational capability was 100 percent. They told me that they could begin pumping within a day of the President giving the order to do it, perhaps within hours if given the order to do it.
Ironically, they said that they would not be able to start drawing down the oil that quickly because of the paperwork requirements. Because of senior officials in the DOE and the need to do a bidding process, it might take 14 to 15 days before they could actually draw down the oil. But operationally, they could draw it down immediately.
Mr. Speaker, this is a very, very good resolution. It has passed the Subcommittee on Energy and Air Quality with the full support of all members on both sides of the aisle. The gentleman from Louisiana (Mr. Tauzin) and the gentleman from Michigan (Mr. Dingell) have agreed to bring it straight to the floor without going to the full committee because of the cooperative nature of the resolution. I hope that we can adopt this by unanimous consent.
Mr. Speaker, I reserve the balance of my time.
Mr. BALDACCI. Mr. Speaker, I yield myself such time as I may consume.
(Mr. BALDACCI asked and was given permission to revise and extend his remarks, and include extraneous material.)
Mr. BALDACCI. Mr. Speaker, I want to point out earlier this year in September I sent a letter to the Secretary of Energy suggesting to him that he also be able to look at this, and I am pleased the gentleman from Texas (Mr. Barton) has brought this forward and the committee has brought this forward, especially today considering the prices on the spot market.
I support H. Res. 250, which urges the Secretary to fill the Strategic Petroleum Reserve. We worked very hard to establish a heating oil reserve, which I am pleased to report is at capacity. But the Strategic Petroleum Reserve does have additional capacity.
In the War Powers Resolution that we passed just a few weeks ago, we found that acts of terrorism continue to pose an unusual and extraordinary threat to national security. Part of that threat is to the security of our energy supplies, particularly those that we procure from the Middle East and other areas of the world.
This is perhaps even more salient now that we are engaged in military action in Afghanistan. The bill the gentleman from Texas (Mr. Barton), the subcommittee chairman, and the gentleman from Virginia (Mr. Boucher), the ranking member, authored and the Subcommittee on Energy and Air Quality reported acknowledges this concern and urges the Secretary of Energy to take some very prudent steps to help guard against a disruption of energy supplies by using his existing authority to fill the Strategic Petroleum Reserve to its current maximum capacity of about 700 million barrels of oil.
At this time the reserve contains only about 545 million barrels of oil, so we could increase our Nation's insurance against an oil supply shock by nearly 40 percent if we fill the reserve to capacity.
This is also a very opportune moment in fiscal terms for the Secretary to fill the reserve. Prices for crude oil and gasoline at the pump have fallen a great deal in the last month, so it will cost the taxpayer less now to fill the reserve than it would have a month ago. For instance, the day before the attack on our Nation spot prices for crude averaged slightly more than $25 a barrel. Today, the spot price for the same product has fallen below $20 per barrel, a 20 percent decrease in price. We should act now, because any supply disruption, even if it does not threaten our security, could end up increasing the cost to our constituents of filling the reserve.
The resolution also urges the Secretary of Energy to expand the reserve to its fully authorized capacity of 1 billion barrels. This is an important long-term position that is supported by Members on a bipartisan basis. By fully realizing the potential of the Strategic Petroleum Reserve, we could nearly double our protection against a severe supply disruption from what we have today.
Finally, the resolution urges the Secretary to consider purchasing oil for the reserve from marginal wells that would otherwise cease production in a manner consistent with current law. Marginal wells are an important resource, and there is strong bipartisan support for ensuring the continued operation of these wells.
Although this resolution does not carry the force of law, it does send an important message to the administration and others that there is strong support for filling the Strategic Petroleum Reserve to its maximum authorized capacity, and it does it in a way that is respectful and consistent with both current law and the War Powers Resolution we recently passed.
Mr. Speaker, I urge my colleagues to support the legislation.
Congress of the United States,
House of Representatives,
Washington, DC, September 28, 2001.Spencer Abraham,Secretary, Department of Energy, Independence Avenue,
Washington, DC.
Dear Secretary Abraham: I am writing to encourage the Department to take steps to fully stock the Strategic Petroleum Reserve. At this time of low oil prices, it makes sense to ensure that we have a full Reserve to protect us from potential instability in the future.
It is my understanding that the SPR currently holds about 544 million barrels of oil and that its capacity is 700 million barrels. I believe we should take advantage of the relatively low oil prices we are enjoying to fill the Reserve to capacity. As you know, these reserves can be used to protect our nation against interruptions in petroleum supply. In these uncertain times, I believe that we should have the maximum possible reserve supply to ensure that we are able to meet our nation's energy needs under a variety of contingencies.
While prices are low, I realize that purchasing the additional oil will require additional resources. I would be willing to support increased appropriations for the Department of Energy to be dedicated to this purpose.
Thank you for your consideration of this matter.
With best wishes,
Sincerely,
John E. Baldacci,
Member of Congress.
Mr. Speaker, I reserve the balance of my time.
Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we have no other speakers so I am going to wrap this up quickly. I thank the gentleman from Maine (Mr. Baldacci) for his excellent work in the last Congress on the Refined Products Reserve. That reserve is in place. We have checked with DOE officials, and it is full. It is ready to be utilized if there is a shortage of fuel oil this winter in the Northeast. Hopefully there will not be. It is another example of the fine bipartisanship that we have on this subcommittee and the full committee. The gentleman from Massachusetts
(Mr. Markey) and the gentleman from Virginia (Mr. Boucher) worked with the gentleman from New York (Mr. Fossella) and the gentleman from New York (Mr. Sweeney), and others on the Republican side to move that legislation in the last Congress.
Mr. Speaker, I do not want to belabor the point on the Strategic Petroleum Reserve. Suffice it to say it is another tool in our country's arsenal as we go after terrorists. We do not want to give any terrorist anywhere in the world the idea that they can blackmail us economically by shutting off our oil supply.
We have invested so far in the reserve approximately $15 billion in 1998 dollars. For a very small incremental cost, we can fill the reserve to its full 1 billion barrel capacity, and it will be available to be used by the President of the United States if he sees fit to utilize it to protect our economy.
Mr. Speaker, I hope we can pass this with all yeas and no nays, to send a very strong signal to our potential enemies around the world that we are not only ready to fight terrorism diplomatically and militarily, but we are also ready to use our economic might if we have to.
Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. BALDACCI. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Petri). The question is on the motion offered by the gentleman from Texas (Mr. Barton) that the House suspend the rules and agree to the resolution, H. Res. 250, as amended.
The question was taken.
The SPEAKER pro tempore (Mr. Petri). In the opinion of the Chair, two-thirds of those present have voted in the affirmative.
Mr. BARTON of Texas. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the Chair's prior announcement, further proceedings on this motion will be postponed.
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