Positive Environment News

US Southern Senators On The Fence On Fuel Reserve

Date: 12-May-09
Country: US
Author: Tom Doggett

WASHINGTON - Drivers in the US Southeast could get relief at the pump thanks to a proposed government-owned stockpile of gasoline to offset major supply disruptions, but lawmakers from those states have yet to back the legislation that would create the emergency fuel reserve.

The Senate Energy and Natural Resources Committee will hold a hearing Tuesday to review the bill, which would require the Energy Department to establish 30 million barrels of petroleum product reserves, such as gasoline and diesel fuel.

The panel's chairman, Democrat Jeff Bingaman of New Mexico, introduced the legislation to help prevent the kind of gasoline supply problems and surge in pump prices that occurred in several southern states last year when hurricanes Gustav and Ike interrupted the fuel chain.

Bingaman's staff has briefed the staff of other panel members about the legislation. But so far many of the lawmakers on the energy committee that represent southern states, mainly Republicans, and whose constituents would be helped the most from the fuel supply cushion, have not said whether they would support the bill.

"Here you've got a Democratic chairman that drafted a bill he considers really good government and the biggest beneficiaries would be largely Republicans from the Southeast," said an aide to Bingaman. "We're still scratching our heads" over the lack of support, he said.

Under the legislation, the Energy Department could take crude oil out of the existing 720-million-barrel Strategic Petroleum Reserve and refine it into gasoline and diesel fuel.

The Senate committee's Republican members that are still mulling over the proposal include Richard Burr of North Carolina, Bob Corker of Tennessee and Jeff Sessions of Alabama.

"This is really a kind of a gift to the Republicans (and) they are still on the sidelines," said the Bingaman aide.

Drivers in other regions would also benefit from the gasoline stockpile because fuel supplies would not have to be diverted from other states and sent to affected southern areas. Also, pump costs nationwide would not rise if price spikes could be avoided in southern states due to a supply emergency after a hurricane.

Committee Democratic member Mary Landrieu of Louisiana also has not come out for the proposed gasoline stockpile, even though her constituents suffered the most from destruction and fuel supply disruptions due to Hurricane Katrina in 2005.

"She has some concerns and believes that more analysis needs to be conducted," said Landrieu spokesman Aaron Saunders.

He added Landrieu is not convinced the lack of a fuel reserve is the "root cause" of the gasoline shortages seen after the hurricanes.

Landrieu's lack of support for the bill could reflect that she also represents the interests of the oil industry in her state that opposes the fuel stockpile, the Bingaman aide said.

The American Petroleum Institute claims that a government-owned gasoline reserve could discourage oil companies from holding their own fuel inventories and the supplies in the stockpile would have to be replaced so they don't degrade over time.

Burr's office said he was still reviewing the bill. A spokeswoman for Sessions declined to comment on the matter and Corker's press secretary would only say the senator would attend Tuesday's hearing.

Bingaman wants to fold the gasoline reserve proposal into a comprehensive energy bill that he hopes the committee will pass before lawmakers leave for their Memorial Day holiday recess May 22.

(Editing by Christian Wiessner)

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