U.S. Senators Introduce Bill on Sale From National Oil Reserves
Washington, Nov. 17 (Bloomberg) -- Two U.S. senators today
introduced legislation in Congress that would allow the Secretary
of Energy to sell crude oil from the nation's Strategic Petroleum
Reserve to combat a surge in prices they say are being
manipulated by foreign producers.
Oil today rose above $26 a barrel on the New York Mercantile
Exchange for the first time since January 1997.
``This legislation would show foreign producers that the
U.S. will intervene into unfair markets to protect our domestic
economy,' Charles Schumer, a New York Democrat who co-sponsored
the bill, said in a statement. ``That knowledge may be sufficient
to prevent OPEC from extensive oil market manipulations in the
first place.'
The bill, called the ``Oil Price Safeguard Act,' was also
sponsored by Republican Susan Collins of Maine. ``A rise in crude
oil prices increases the price of home heating oil and
gasoline,' hurting consumers in Northern states, said Collins in
a statement. No other senators have signed on to support the bill
at this stage, a spokeswoman for Schumer said.
Oil ministers from Saudi Arabia, Venezuela and Mexico met
today in Riyadh, Saudi Arabia, to affirm their commitment to a
program of reduced output -- orchestrated by the Organization of
Petroleum Exporting Countries -- that has more than doubled the
price of oil this year. Schumer has characterized current prices
as a threat to the U.S. economic boom, as well as a hardship for
his constituents.
The legislation would amend the Energy Policy and
Conservation Act of 1975, which established the Strategic
Reserve, and the Energy Policy Act of 1992, according to the
statement from Schumer's office.
Schumer met with Energy Secretary Bill Richardson last month
in an attempt to get the administration to sell U.S. reserves in
the face of rising oil prices, a proposal the Clinton
administration rejected. The Schumer-Collins bill would require
the Energy Department to examine oil prices if they rise above
$25 for more than 14 days.
The government set up the reserve in 1975 to provide an
emergency supply of oil in the event of a crisis, such as the
Arab oil embargo of 1973. It currently holds about 573 million
barrels of oil -- equal to two months of imports -- according to
the Energy Department. The reserve has only been tapped once, in
1991, by President George Bush during the Persian Gulf War.
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