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Senate Success on Oil Reserve

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Tue, May 13, 2008 at 4:37 pm

    Senate Success on Oil Reserve

    5-13-08 by dugan

     

     

    What the Senate did today isn’t huge, and isn’t quite finished, but a 97-1 vote in favor of stopping White House oil purchases for the Strategic Petroleum Reserve is a landmark. The vote cracks the agenda-driven gridlock that has blocked effective Senate actions against the oil price crisis. It holds out the possibility of a shift toward doing the peoples’ business rather than gaming Senate rules to score partisan points.

    As the New York Times story notes, there’s a way to go before the legislation gets to the desk of President Bush, who has flatly refused to stop purchasing record-priced oil for a strategic reserve that is already at a record high level:

    The House was likely to vote Tuesday evening to approve its own measure
    to cut off shipments to the reserve. If the sentiment in the House
    mirrors that in the Senate, any veto of the measure by President Bush
    would be likely to be overridden. But the Senate measure is part of
    another bill, while the House version is a stand-alone item, so there
    are some procedural hurdles that must be overcome before the oil-cutoff
    move can emerge from the full Congress.

    "Procedural hurdles" are opportunities for delay, perhaps to protect President Bush from having to choose  between a doomed veto and reversing his position. There are surely Senators who voted for the bill today only because refusing to do so would haunt them in the next election. Bush could also find a way to ignore the law if it does land on his desk. But that it passed the Senate is a mark of change, a recognition that the U.S. economy is on its knees because of oil prices.

    The 70,000 barrels a day of $120 oil that taxpayers are buying for the reserve are less than 1% of U.S. consumption, but the price of oil reacts to tiny changes in supply. A cap on puchases is also a symbolic show of opposition to current oil prices above $120, for no market reason. Most analysts predict at least a few cents’ effect on gasoline prices just from the cap.

    Congress should have taken the next logical step and told Bush to also sell some oil out of the reserve,  which would multiply the effect. But after months of complete gridlock, any forward movement is worth a cheer. Maybe the Senate will actually debate a bill, now locked up in committee, to remove a few of the oil industry’s taxpayer subsidies.

     

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