STRATEGIC REFINERY RESERVE ACT -- (Senate - April 10, 2007)
Mr. KOHL. Mr. President, I rise today to speak on a bill I introduced, the Strategic Refinery Reserve Act of 2007. This bill would authorize the Department of Energy to build enough refining capacity to meet the energy needs of the Federal Government--primarily the Department of Defense--and to supply the private market in times of shortages and price spikes.
Hurricanes Katrina and Rita, which severely damaged oil refineries in the Gulf Coast, illustrated the Nation's vulnerability to a disruption in supply of refined petroleum and exposed shortcomings in our current Strategic Petroleum Reserve system. The Strategic Refinery Reserve Act would address these issues by having a refining capacity of 5 percent of total U.S. consumption of gasoline, diesel, and jet fuel. Three percent of capacity would be held in reserve, ready to increase supply in the private market in times of energy emergencies. The remaining 2 percent of that would go to the Federal Government to support the day-to-day needs of the military, saving taxpayers from paying the oil industry's inflated prices.
The U.S. Energy Information Administration reported Monday that drivers paid an average of $2.80 a gallon for regular gasoline last week, up from $2.70 the week prior. According to the report, prices are now 11.7 cents per gallon higher than April of 2006. The price per barrel of oil, set by the Middle East cartel Organization of Petroleum Exporting Countries, OPEC, is only one factor that pushes up the price of gas and oil in our country. Refining capacity, the infrastructure that takes crude oil and turns it into gas, is down dramatically, which pushes the price of gas up for everyone.
U.S. refineries today are running at full, or near full, capacity. In 1981, there were 324 refineries in the United States; today there are 149. Big Oil has made it clear that they are unwilling to reinvest their record profits in new refineries because the less they sell, the more they make per gallon. That may be good for oil company shareholders, but it is bad for consumers. The Strategic Refinery Reserve Act will ensure the availability of emergency refinery capacity and protect consumers from sharp increases in the price of petroleum products. Our economy, our military, our communities and our families are struggling under the burden of high energy prices. They expect us to work to bring energy prices down. This bill would do that.