FAA Reauthorization Act of 2007 - Motion to Proceed

Floor Speech

FAA REAUTHORIZATION ACT OF 2007--MOTION TO PROCEED -- (Senate - April 29, 2008)

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Mr. BARRASSO. Mr. President, today I rise to speak about the price of gasoline and the price of diesel fuel, which is affecting every driver in America. My principal message is that Washington policies should not drive up the prices at the pump. At an absolute minimum, Federal practices should not be making prices any worse.

According to the American Automobile Association, the average retail price for regular unleaded gasoline is $3.60 a gallon. The average price of diesel fuel is $4.24 a gallon. This is before this summer's driving season has even started.

Consumers all across America are hurt by the inflationary pressures at the pump. My constituents in Wyoming know firsthand the huge impact that $110 or $120 per barrel of oil has on their wallets. I visit with them every weekend. The price at the pump in Casper, WY, just 3 weeks ago was $2.91. This past weekend, it was $3.31. Wyoming ranks at the top of all States in terms of vehicle miles traveled on a per capita basis. Because of my State's sparse population and great distances, that means it is not uncommon to commute 20, 50, or even 100 miles round trip to work, to school, or just to buy groceries.

Today's current oil prices are primarily due to supply and demand fundamentals. At close examination, there are really several different underlying contributors to today's high prices: rising world demand, especially in India and China; geopolitical tensions in the Middle East, in Venezuela, in Nigeria; limited options for acquiring additional supply; the weakness of the U.S. dollar; environmental regulations; and perhaps even excessive market speculation and manipulation. Recognizing this, Federal Government practices should not--should not--drive prices even higher. That is why I am announcing legislation today, S. 2927, that provides for a temporary suspension of Federal oil purchases for the Strategic Petroleum Reserve.

This Strategic Petroleum Reserve was initially created in the mid-1970s. It was set up to protect the Nation from oil supply disruptions that followed the Arab oil embargo. I support the goal of protecting America's energy security. The Strategic Petroleum Reserve has served our Nation well. This legislation, though, says enough is enough. At today's high prices, this legislation tells the Government to stop putting any more oil into the Strategic Petroleum Reserve--to stop doing it whenever the average price of gasoline is over $2.50 a gallon. This chart clearly shows when we went above the red line, above $2.50, and when it has come below and when it is above. This has been in the last 3 years. This legislation also tells the Government to stop putting oil into the Strategic Petroleum Reserve when the price of diesel fuel exceeds $2.75 a gallon.

Currently, the United States is buying about 70,000 barrels, 70,000 barrels of oil each and every day to save and inject underground. The Government keeps buying it every day, regardless of price. When the prices of fuel go up, people try to use less. They carpool, they use public transportation. Not the U.S. Government--70,000 barrels every day regardless of need, regardless of price. The Strategic Petroleum Reserve already contains 700 million barrels of oil.

The Administrator of the Energy Information Administration recently testified to the Senate Energy and Natural Resources Committee. He said taking this much oil out of the market every day does drive up the price for American drivers. He wasn't sure of the amount. He estimated it could be $2 per barrel of oil, maybe a nickel per gallon. A private analyst has argued that continuing to fill the Strategic Petroleum Reserve could add as much as 10 percent to the price of gasoline--10 percent. While there appears to be a disagreement on the magnitude, it is clear that when the Government is competing with the American driver, it does have an impact. Every day, the Government is pulling 70,000 barrels of crude oil from the market. This is oil which could otherwise be used by airlines, by trucks, or by our neighbors.

My bill would also impose fiscal responsibility on future oil purchases. When the Federal Government buys oil at today's prices, it is an expensive proposition for all taxpayers. At current prices, it will cost over $8 million a day for the Government to purchase these 70,000 barrels of oil. Well, that equates to about $250 million a month, nearly $3 billion a year. The impact to the Treasury and to the American driver is real. Currently, the goal is to fill the Strategic Petroleum Reserve with up to 1.5 billion--billion--barrels of oil. At the current rate of putting in 70,000 barrels a day, it will take another 30 years to achieve this level--70,000 barrels a day for 30 years.

I recognize that a temporary suspension by itself is not going to bring down the price of gasoline to $2.50 or even $3 a gallon overnight. But I made a commitment to the people of Wyoming. I made a commitment to do what I can to help when it comes to Washington policies that just don't seem to make sense. As a physician, I took an oath to do no harm. As a Senator, I am committed to a philosophy of Government accountability and fiscal responsibility.

In addition to temporarily stopping the stockpiling of oil at these high prices, there is a second component to this bill: commonsense steps for fiscal responsibility. This legislation includes simple recommendations put forth by the Government Accountability Office.

This bill would require dollar cost averaging when it comes to purchasing oil in the future. We could save taxpayers money if we just purchased the same dollar amount of oil each month rather than the same volume of oil each month. This means you end up buying more oil when the prices are low and less oil when the prices are high. The practice works for individual investors. It is what millions of Americans do every month with their retirement plans.

There is an article in this week's Fortune magazine. It is entitled ``Where to Put Your Money Now.'' The article says: With the markets giving off so many mixed signals, use dollar cost averaging. The Federal Government should operate with that same prudence. If the Department of Energy had used this approach in recent years, it could have saved American taxpayers over $590 million.

The Federal Government could also save taxpayer dollars by storing heavier grades of crude oil. The Government Accountability Office has pointed out that such a strategy would be more cost-effective and provide more refiners with the kind of oil the refiners can actually use.

These are two fundamental steps to improve Government accountability and fiscal responsibility. Many of us complain about Government waste. In this legislation, we have a chance to do something about it.

I fully recognize that our energy problems are complex. This body recently adopted new corporate average fuel economy requirements to improve long-term efficiency in our cars and in our trucks. Increased energy efficiency and conservation must be an important part of any long-term energy solution. Other policies worthy of debate include expanded domestic production of energy, and we have also held hearings on excessive speculation and market manipulation. More recently, some have called for a holiday on the Federal gasoline tax. All of these efforts are worthy of debate. A temporary halt on adding more oil to the Strategic Petroleum Reserve is really the low-hanging fruit. If we can't agree on these simple steps for fiscal responsibility, how will we come to an agreement on the more complex solutions to energy security?

I urge my colleagues on both sides of the aisle to support this legislation without delay. With gasoline prices at an alltime high, the American driver--the American driver--should not have to compete with Washington policies that are driving up the price at the pump.

Mr. President, I yield the floor.

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