Thursday, March 6, 2003
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Dear Mr. President:
Over the past month a bipartisan group of Senators have requested that you order a release of the Northeast Home Heating Oil Reserve to help the millions of households in the Northeast that depend on heating oil to keep warm. I'm writing today to reiterate my concern for families across the Northeast and the region's economy and to request once again that you order a release from the reserve.
According to the Energy Information Administration's Short-Term Energy Outlook released on February 7, 2003, heating oil prices are expected to increase 52 percent this winter compared to last. The rise in prices has been caused by several factors, including the prospect of war in Iraq, decreased Venezuela production and low stocks.
We have faced similar conditions before. In the months leading up to the Persian Gulf War in 1991 the price of oil climbed precipitously, reaching $36 per barrel. The consequences of that price spike were felt by families and businesses across the country and certainly contributed to economic recession starting in late 1990. That recession eventually put more than a million and a half Americans out of work. I'm greatly concerned over how higher oil prices, and especially the rise in heating oil prices, may harm the overall economy, small and large businesses and family budgets in New England.
Anecdotal evidence certainly suggests that this year's exceptionally high heating oil prices, the highest in 12 years, are hurting New England's economy. Unfortunately, no federal agency appears to be tracking the economic consequences of this trend and ready to provide even preliminary data on the current situation. Nevertheless, data from the Congressional Research Service, the Energy Information Administration, Census Bureau, industry sources and press reports suggest that New England households may pay as much as $556 million more on heating oil this winter than last. On a state-by-state basis, it appears that Massachusetts households will spend possibly $186 million more this winter than last, Connecticut $147 million, Maine $90 million, New Hampshire $61 million, Rhode Island $41 million and Vermont $31 million.
I'm greatly concerned with the damage that these higher costs will cause to New England's already sluggish economy as more than half a billion dollars is drained out of the region to cover the higher cost of heating oil.
I'm equally concerned with difficulties that these high prices cause for low and middleclass families, some of whom face the difficult choice of heating their homes or purchasing other necessities. I urge you to consider an immediate release from the Northeast Home Heating Oil Reserve to help New England's economy and families.
John F. Kerry