Foster Co-Sponsors Bill in Effort to Lower Gas Prices

Press Release

To cut the costs of gas prices, and relieve the financial strain on 14th District consumers, Rep. Bill Foster (IL-14) announced he is a co-sponsor of Rep. Peter Welch's bill, the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008, H.R. 5473. Foster will join more the 25 other Representatives in this fight to make fuel more affordable.

"With summer just around the corner, these extreme prices for fuel show no end in sight," Foster said. "Our families and businesses are being squeezed in every direction possible - from the credit crunch to the housing crisis and now to the most basic of necessities - gasoline - we need to take action now, that's why I am supporting this legislation to make gas cheaper.

"Our families can't wait any longer for Washington to act - the time is now, and this is the best bill to bring immediate relief," Foster said.

The proposed legislation would require the Secretary of the Department of Energy (DOE) to suspend all shipments to the Strategic Petroleum Reserve (SPR) in 2008, or until the average price of crude oil falls below $50 a barrel.

Rep. Foster is part of a bipartisan effort to ease pain at the pump for consumers with the three presidential candidates - Sens. Barack Obama, Hillary Clinton and John McCain agreeing that stopping the stock piling would increase supply of oil, making fuel cheaper.

"High gas prices hurt everyone, and have a negative ripple effect on every aspect of life for Illinois businesses and families," Foster said. "My co-sponsorship on this bi-partisan effort shows my commitment to finding common sense solutions to fixable problems. I call on President Bush and Speaker Pelosi to pass this bill."

Gas prices have skyrocketed, and are up more than 141% in Illinois since 2001.

The SPR currently contains approximately 700 million barrels and is 96 percent full. Unlike previous decades, since 2001 the Bush administration has purchased oil for the SPR regardless of market conditions and shipments have continued despite record-high oil prices. Last November, the DOE announced that it had contracted for an additional 12.3 million barrels of oil shipments beginning this year.

Experience shows that suspending SPR purchases will drive down gas prices in the short-term:
- A 2003 report by the Minority Staff of the Permanent Subcommittee on Investigations of the Senate Committee on Governmental Affairs concluded that oil deposits to the SPR drove up crude oil prices by tightening supply and reducing domestic stocks.
- Independent economists, including a team at Goldman Sachs, have estimated that filling the SPR has raised the cost of oil by at least $2.25 per barrel, or as much as $6 per barrel and $0.25 per gallon of gasoline at the pump.
- Following Hurricane Katrina, DOE offered 30 million gallons of SPR oil (only 11 million gallons were actually withdrawn) as part of a larger International Energy Agency release, helping reduce crude prices by about $5 a barrel.
- In late 2000, President Bill Clinton authorized a "swap" of oil in which 30 million barrels were released from the SPR to alleviate the threat of a home heating oil crisis due to low inventories, causing prices to fall from $37 to $31 per barrel.

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