Abercrombie says U.S. House Approval of Strategic Oil Bill Seeks to Lower Gas Prices

Press Release

U.S. Representative Neil Abercrombie says today's passage of a House bill offers consumers in Hawaii and across the nation the prospect of temporary relief from skyrocketing gasoline prices by halting oil shipments into the nation's emergency oil reserve until the end of the year.

The bill's passage also follows Abercrombie's call last March to manage the nation's emergency oil supply—known as the Strategic Petroleum Reserve—as one way to combat rising gas prices.

"This legislation is sorely needed, particularly in Hawaii. We are in the middle of an energy emergency that's pushing our economy into a recession with high gas and jet fuel prices which are hurting consumers, businesses, and our local and national economies—even contributing to the demise of Aloha Airlines," said Abercrombie who voted for the legislation.

On a vote of 385-25, the House today approved the bill (H.R. 6022) directing the Bush Administration to suspend temporarily filling the reserve until the end of the year, in an effort to rein in rising gas prices which have topped $4.00 per gallon for unleaded premium in Hawaii. The U.S. Senate passed a similar provision by a vote of 97-1.

"Maintaining the reserve requires the U.S. Department of Energy to take 70,000 barrels of oil off the market every day. It's estimated that a temporary halt to filling the reserve could reduce gas prices up to 24 cents a gallon and provide some relief to consumers, businesses, and the economy as a whole. The reserve currently has enough oil to meet the nation's security needs. It's 97 percent full which is its highest level ever," said Abercrombie, who wrote a letter to President Bush last March asking him to use his authority to release crude oil from the reserve to help bring down the price of jet fuel and other fuels for industries essential to the U.S. economy.

Despite bipartisan requests, including Abercrombie's letter, the President has refused to use the Strategic Petroleum Reserve to address the rising gas prices nationwide and their effects on the U.S. economy.

By law, the Bush Administration has the authority to suspend filling the oil reserve. The Energy Policy Act of 2005 permanently authorized the reserve and permits the fill only if it can be established that adding to the reserve is not pushing up prices.

"The current energy emergency has been particularly damaging to the pocketbooks of every consumer and business in Hawaii because of our state's heavy reliance on air and ocean transportation to move goods and services," said Abercrombie. "This bill offers temporary relief and should not be seen as a long-term solution to the national energy emergency. However, it is an alarm to all of us that substantial and serious measures must be taken to prevent permanent damage to our economy."

The U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. Established in the aftermath of the 1973-74 oil embargo, the reserve provides the president with a response should a disruption in commercial oil supplies threaten the U.S. economy. The federally-owned oil stocks are stored in huge underground salt caverns along the coastline of the Gulf of Mexico.

The reserve also allows the United States to meet part of its International Energy Agency (IEA) obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve. The IEA, founded during the oil crisis of 1973-74, acts as energy policy advisor to 27 member countries in their effort to ensure reliable, affordable and clean energy for their citizens. The Energy Policy Act of 2005 directed the Secretary of Energy to fill the Strategic Petroleum Reserve to its authorized one billion barrel capacity.

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