Pressure to 'do something' provides momentum for suspending SPR purchases

Truckers drove around the National Mall on Apr. 28, blowing the horns on their rigs and shouting through bullhorns before an afternoon rally at the US Capitol to protest record-high diesel fuel prices.

The Energy Information Administration reported the same day that the nationwide average retail price for a gallon of diesel was $4.177 cents, 49% more than on April 30, 2007 when the average price was $2.811/gal. The average US retail price for regular gasoline climbed 21% to $3.603/gal from $2.971/gal during the same period, EIA's weekly gasoline and diesel fuel update indicated.

When they returned from their spring recess, members of the 110th Congress said their constituents complained about high food and fuel prices. The voters are restless as almost a third of the Senate and nearly the entire House stand for re-election. It's increasingly apparent that many members are feeling pressure to "do something."

Most probably won't be satisfied for very long to simply let House Minority Whip Roy Blunt (R-Mo.) say Democrats have done nothing since regaining control of Congress early in 2007 while fuel prices have continued to climb, or to let Speaker Nancy Pelosi (D-Calif.) respond that House Democrats have passed at least three measures addressing higher fuel prices which deserve Republican support.

What measures involve

That support isn't likely since the measures involve giving the Federal Trade Commission broader authority to investigate and prosecute price gouging allegations, ordering the Department of Justice to apply US antitrust laws to the Organization of Petroleum Exporting Countries, and moving $18 billion in tax incentives from major oil companies to alternative and renewable fuel programs.

Republicans argue that it would be more constructive to increase domestic oil and gas supplies by authorizing leases on more of the Outer Continental Shelf, within the Arctic National Wildlife Refuge's coastal plain, and in more of the Rocky Mountains. That support isn't likely either since many Democrats think producing more fossil fuels simply will accelerate global climate change.

Democrats and Republicans also don't appear likely to come together and support Sen. John McCain's (R-Ariz.) proposal to suspend the federal gasoline tax through the summer. But they could embrace Sen. Byron L. Dorgan's (D-N.D.) bill to halt purchases for the Strategic Petroleum Reserve while crude oil prices are near record levels.

'Momentum is building'

Dorgan, who has moved the purchase suspension trigger in his bill from $50 to $75/bbl since introducing it on Feb. 6, is still actively looking to attach it to another bill as an amendment, a member of his staff told me on Apr. 22. "He has the support of all 51 Democratic senators and, now, all three major presidential candidates. So momentum is building," he said.

In the House, Rep. Edward J. Markey (D-Mass.) has spoken out frequently on the issue. On Apr. 9, he and Reps. Rahm Emanuel (D-Ill.) and Peter Welch (D-Vt.) sent a letter to President George W. Bush urging suspension of SPR purchases and a release of oil from the reserve. Administration officials have said that neither action would have much impact since SPR purchases represent only a small percentage of the total world oil market.

But the night before the Apr. 24 hearing on crude oil purchases and other SPR management issues by the Select Committee on Energy Independence and Global Warming, which Markey chairs, nine House Republicans sent a letter to Pelosi expressing their support for halting purchases. If GOP support for the idea continues to grow on both sides of the Capitol, pressure will increase on the White House to drop its opposition.

Markey was noncommittal when I asked him after the Apr. 24 hearing if he would wait and simply support Dorgan's bill if it reaches the House. "Hope springs eternal. I'm hoping the president realizes this is a problem and does something," the congressman told me.

Contact Nick Snow at [email protected]