Flood Insurance Reform and Modernization Act of 2007

Floor Speech

FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007 -- (Senate - May 13, 2008)

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Ms. COLLINS. Mr. President, I wish today to support the amendment offered by the Senator from Nevada, Mr. Reid. It embodies a policy change that I have advocated for many months. In January, I wrote to the Secretary of Energy and urged the administration to stop filling the SPR while oil prices are so high. The Reid amendment would suspend acquisition for the Strategic Petroleum Reserve, SPR, until the end of the year or until the price of a barrel of oil goes below $75.

The SPR is an emergency stockpile and an essential safeguard against major disruptions in global oil markets. However, the SPR already contains nearly 700 million barrels of oil, 97 percent of its current storage capacity. This is more than sufficient to meet a crisis.

Mr. President, our Nation faces record-high energy prices affecting almost every aspect of daily life. The prices of gasoline, home heating oil, and diesel are creating tremendous hardships for American families, truckers, and small businesses. High energy prices are a major cause of the economic downturn. Last week, crude oil was trading at over $120 per barrel.

The administration's decision to fill the SPR when oil prices are so high defies common sense. In 2005, the Senator from Michigan, Mr. Levin, and I joined forces on a bipartisan amendment directing the Department of Energy to better manage the Reserve by requiring the Department to avoid purchases when prices are high so as not to drive up prices further by taking oil off the market. I don't believe the Department of Energy is abiding by this law. If it were, the Department would not be making purchases while prices are so high.

It simply does not make sense for the Department of Energy to be purchasing oil for the Reserve at a time when oil prices exceed $120 per barrel. The Federal Government is taking oil off the market and thus driving up prices at a time when consumers are struggling to pay their fuel bills.

If the administration stopped purchasing oil for the SPR, the Energy Information Administration has estimated that the impact on gas prices would be between 4 and 5 cents a gallon. Other experts believe it is considerably higher. At a hearing before the Permanent Subcommittee on Investigations in December, one energy expert, Philip Verleger, said, ``DOE's actions added between 5 and 20 percent to the price of oil.'' It is a bad deal for taxpayers for the Department of Energy to be purchasing oil when prices are so high.

There are other short-term steps we must take to address the energy crisis--for example, regulating energy futures markets and repealing tax breaks for major oil companies--but suspending filling the SPR is a key step that I hope we approve tomorrow.

In the long term, our challenge to address energy prices is, of course, to reduce our reliance on imported oil. We need to pursue the goal of energy independence just as fervently as the Nation embraced President Kennedy's goal in 1961 of putting a man on the Moon. Energy independence, stable energy costs, and environmental stewardship are goals that are within our reach. I urge my colleagues to get us started on the effort by supporting this proposal to suspend filling the Strategic Petroleum Reserve.

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