SENATORS KOHL, COLLINS CALL ON OIL INDUSTRY TO HALT UNNECESSARY HEATING OIL EXPORTS TO ENSURE BETTER SUPPLIES FOR MIDDLE AND LOW INCOME AMERICAN FAMILIES
Senators Send a Letter to CEOs of Huge Oil Corporations
Concerned about the skyrocketing cost of home heating oil and potentially short supplies this winter, U.S. Senators Herb Kohl (D-WI) and Susan Collins (R-ME) are calling on leaders of the oil industry to pledge to halt unnecessary exports of heating oil to all nations other than Canada. Doing so would help moderate the costs of heating oil, particularly in states like Maine and Wisconsin where prices are higher than the national average.
In their letter, the Senators wrote, " In anticipation of the upcoming Senate Energy Committee hearing on high energy prices on November 9, we ask for your pledge to temporarily halt unnecessary exports of any home heating oil products that your company is currently sending abroad. We believe that by halting such exports, your companies could significantly ease the expected burden of skyrocketing home heating prices for the coming winter."
The Senators' letter was addressed to CEOs of Chevron, Marathon Oil Corporation, Amerada Hess Corporation, Conoco Phillips, Tesoro Corporation, Sunoco, Inc., CITGO Petroleum Corporation, and Velero Energy Corporations, the largest producers of home heating oil in the United States.
Text of the Senators' letter is as follows:
In anticipation of the upcoming Senate Energy Committee hearing on high energy prices on November 9, we ask for your pledge to temporarily halt unnecessary exports of any home heating oil products that your company is currently sending abroad. We believe that by halting such exports, your companies could significantly ease the expected burden of skyrocketing home heating prices for the coming winter.
According to the Energy Information Administration (EIA), between January and August of this year U.S. companies exported more than 48 million barrels, or approximately 2 billion gallons, of home heating products. This amount is 24 times the size of what is stored in the Northeast Heating Oil Reserve. While some of this went to both Canada and Mexico, large quantities were also sent to Argentina, Chile, France and Peru.
The EIA has also forecasted significantly increased home heating costs across the country. According to EIA's recently released Winter Fuels Outlook, the average U.S. household can expect to pay about $260 more for heating this winter. For households primarily using home heating oil, that estimate increases to $380 or 32 percent more than last winter, while those using propane can expect to pay an average of $325. We need not remind you that this is merely an average: for states in the Northeast and Midwest, the actual prices will be significantly higher. While these increased costs will place an undue burden on all sectors of the economy, the heaviest toll will clearly be on middle and low-income families.
Given the forecasted spikes in home heating costs, we believe your companies should ease the burden on American consumers by halting exports to all nations other than Canada, as well as temporarily interrupting the creation of products designed for the express purpose of exportation. This is a common sense approach -- how can we ask American citizens to expect to pay an additional $121 to heat their homes when U.S. companies are companies exporting billions of gallons of refined heating oil and propane?
It is important to note that this request is not without precedent. In 2000, in response to a request from then U.S. Energy Secretary Bill Richardson, some refiners agreed to temporarily halt heating oil exports. As many as four refiners voluntarily suspended exports, citing "market conditions" and the desire to ensure adequate supplies of home heating oil for the winter.
Americans across the country could face potentially life-threatening conditions this winter, when temperatures drop and home heating prices soar. We believe this is a unique opportunity to prevent such a crisis, and look forward to hearing from you.