Petroleum Administration For Defense District 5

Floor Speech

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Ms. MURKOWSKI. Now, Mr. President, I would like to turn quickly to a Department of Energy proposal to construct a new petroleum product reserve on the west coast. We call this PADD 5, short for Petroleum Administration for Defense District 5. PADD 5 is important because it consumes 17 percent of the Nation's gasoline, 13 percent of its diesel fuel, and 30 percent of its jet fuel.

At the same time, PADD 5 is geographically isolated, according to the Energy Information Administration. The approximately 30 refineries operating on the west coast are responsible for supplying nearly all of its petroleum products.

The argument for a product reserve is relatively straightforward. Because PADD 5 is separated from the rest of the country by the Rocky Mountains and from the world by the Pacific Ocean, a stockpile of refined fuel should be established. That is the argument that is out there. I don't oppose a study of this concept, but I can see the pitfalls out there. PADD 5 imports over 1 million barrels of crude oil and petroleum products each day, suggesting that it really is not cut off from the world in the first place. And bear in mind the size of the district that we are talking about. Any stockpile would have to be really enormous to have significant impact.

Finally, would Federal gasoline reserves supplement or replace commercial stocks? That is a question that needs to be asked.

So perhaps the solution is not a refined product reserve at all but instead a return to basics, and that basic is crude oil.

After all, there are reasons we chose crude oil instead of the products when we first created the Reserve. By and large, that rationale hasn't changed. First, oil is better suited, chemically and economically, for long-term storage underground, we don't have seasonal specifications on oil as we do on gasoline, and oil can be processed into an array of products while gasoline cannot.

Very quickly, taking this back to Alaska, a gasoline reserve on the west coast of any size would be small potatoes when compared to the incredible resource base we have in Alaska. For decades now, tankers have shipped North Slope crude to the line of refineries that stretch from Anacortes, WA, down to Los Angeles. Drivers up and down the coast fuel their cars with gasoline that is refined from this Alaskan oil every day.

Alaska North Slope crude oil is chemically similar to the kinds of oil stored in the SPR. In fact, according to the Department of Energy, over 30 million barrels of Alaskan oil have been stored in the Strategic Petroleum Reserve. West coast refineries are optimized to run Alaskan crude. The Trans-Alaska Pipeline System is only pumping about 500,000 barrels per day, down from 2 million barrels per day at its peak. So there is plenty of room in our already built, already operating pipeline. The problem is--and you have heard me say this before--the Federal Government controls some 60 percent of the land in our State. More than 10 billion barrels of oil are buried under our onshore Federal lands alone, to say nothing of what is held in our offshore waters but remain almost universally inaccessible to American explorers and producers. That includes about 10 billion barrels in the nonwilderness portion of ANWR, where we are asking for permission to develop 2,000 acres or 0.01 percent of the surface of the refuge. That is all we are asking to access. Beyond our ANWR resources, we have at least another 900 million barrels in our National Petroleum Reserve, which is an area that is specifically reserved for development. The estimate on the 900 million barrels there is that it is likely far too low.

For the record, I would add that Alaskans overwhelmingly support development of both of these areas. More than 70 percent of Alaskans want development, understanding the significant economic benefits it will bring and the strong record of environmental stewardship we have in the State.

We have an opportunity. We have an opportunity to develop our resources in order to create jobs, generate revenues, and bolster our Nation's security and competitiveness. By doing this, we can actually address not just one but two threats: First, the Trans-Alaska Pipeline is just one-third full; in large part because of the anti-energy decisions made by this administration and the west coast is more vulnerable to supply disruptions as a result of falling production.

You think about a crisis situation in the Middle East. The west coast will need more oil. Its refineries are ready to run Alaskan crude and Alaskans are ready to ship it, but there is nothing to ship because the oil is still in the ground and there is no way to transport it from the North Slope to the terminals along the southern coast of the State.

I am not talking about keeping our oil in pristine condition, never to be used. Energy is not fine china that you keep up on a shelf. The Strategic Petroleum Reserve is not a petroleum preserve. Our strategic stocks, barrels ready to go, should rarely be tapped, but Alaskan resources are already part of the daily life of Californians, Hawaiians. The resource must be accessible, though, but first they need to be accessed.

Opening Alaska's resources now would ensure that more oil is transported through TAPS. A healthy pipeline would ensure that oil can be shipped from Alaska to fuel the west coast refineries when they need it and help ensure that energy remains affordable for the west coast.

Instead of constructing an entirely new product reserve, as some are contemplating, perhaps what we should do is preserve the infrastructure we have already built and leverage it to boost our energy security. Why would we want to build a reserve when you can prevent a shortage in the first place by letting a State that wants to produce oil go ahead and produce the oil? To me that is sound, strategic thinking. That would be a policy that benefits us instead of simply costing more money that we don't have. That is the kind of thinking that I believe our Nation and our future generations should have.

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