Energy and Water Development and Related Agencies Appropriations Act, 2012

Floor Speech

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Ms. MURKOWSKI. Madam President, I have come to the floor this morning to discuss a provision in the Energy and Water appropriations bill that apparently Senator Bingaman has just spoken to. This would require the sale of $500 million worth of oil from our Nation's Strategic Petroleum Reserve or we call it the SPR. I do believe this is an inappropriate use of our limited emergency stockpiles, and I think it would also set a dangerous and an unsustainable precedent for the future.

As I understand it, the administration first requested this sale in its fiscal year 2012 budget proposal and justified it by asserting there was an integrity issue in one of the caverns where the SPR oil was stored. We heard this discussion before the Energy Committee some months ago. He asserted the sale was necessary because DOE had to drain the oil in that cavern to perform some repairs that were apparently necessary.

The House Appropriations Committee subsequently authorized the sale in its version of the bill which was then released in June. At that point in time, based upon DOE's representation, I guess it was kind of hard not to argue the sale was not justified. But then events took a different course. Several weeks later, as part of a coordinated effort with the IEA to increase global supplies, the President chose to sell about six times more crude from the SPR than the House had originally contemplated.

Whether one supported that sale or not, I think it would have been reasonable to assume or to expect the administration would sell the crude from the cavern that needed the repairs. They needed to get that out so they could do the necessary repairs. So when an unannounced sale comes along, one would think they would take the oil from that cavern, thereby solving at least one of the problems and obviating the need of a future maintenance-related sale. Enough oil has now been sold from our emergency reserves to fill not one but six troubled caverns.

The only justification that can remain now is the need for more cash. We need more money. Given that background, I would encourage the Senate to consider that selling $500 million worth of our emergency oil reserves right now simply to help offset other appropriations is akin to cashing out our insurance policy in order to cover the cost of a mortgage we can't afford in the first place.

The SPR was designed to be that emergency safety net, if you will, or like an insurance policy. Remember, there is a very good reason why we have this insurance policy in the first place. Congress created the SPR in the aftermath of the oil embargo back in the 1970s to serve as a safety net in the event we were to see a major supply disruption. Given the volatility that continues to churn the global markets, our strategic stockpile is arguably more important today than ever before. As long as we maintain a large volume of oil within the SPR, we will ensure Americans have some level of protection against future disruptions. If we decide not to take the long view, we face the very real risk of being forced to spend more tomorrow to repurchase the oil that is being sold today.

One may ask: How likely is any kind of a future disruption? I would say the odds are still higher than we would like. Our Nation remains roughly 50 percent dependent on foreign oil, importing close to 9 million barrels a day at the cost of hundreds of billions of dollars a year. The world, as we know, is not exactly stable. Large volumes of Libyan oil remain offline. Iran continues to provoke its neighbors, raising the specter of future attacks. Saudi Arabia's leadership is aging rapidly, leaving the door open to perhaps future unrest and upheaval. China, India, and many of the other countries are rapidly expanding their oil consumption and, in the meantime, forging close relationships with major suppliers that can be leveraged in times of emergency.

Here at home, the Federal Government continues to hinder the development of new supplies that would improve our energy security and reduce the need for a strategic reserve. We have seen development halted or delayed in Alaska in the northern part of the State, in the Rocky Mountain West, and a number of other areas. The new 5-year leasing plan for offshore development does take a few small steps, but it keeps both the Atlantic and the Pacific coasts under a de facto moratorium through at least 2017. The administration has also delayed its decision on the Keystone XL pipeline. We just saw that news this week. This would have carried significant volumes of Canadian oil. Again, that is oil from an ally, from a neighbor, that would have brought that into this country.

The result is, we are not doing, in my opinion, nearly

enough to reduce our dependence on foreign oil, so we still need a Strategic Petroleum Reserve, and we cannot treat it as a national ATM that can be tapped when the money is tight. That is not the reason we should have or the way to utilize the SPR.

I wish to share a quote from a witness who testified before the Energy Committee earlier this year. His name is Kevin Book. He is a real expert on energy policy, and I think he made quite an impression on our committee. He encouraged us to seek alternatives to petroleum, but he also said:

Selling oil out of the Strategic Petroleum Reserve to pay for efficiency gains and alternative fuels could seriously diminish U.S. energy security without necessarily delivering financial benefits.

For anybody who might be interested, I am happy to provide a copy of his testimony. I think it was quite useful in understanding why this approach is not appropriate at this point in time.

As we seek to pay for legislation that comes before us--whether it is this appropriations bill or something else--I continue to believe one of our best paths forward is to produce more of our own abundant resources and then put the resulting Federal revenues to good use. Instead of selling our emergency oil and risking future dilemmas, we should, instead, put policies in place that expand and that accelerate the pace at which we develop our immense natural resources.

Right now, Alaska has about 40 billion barrels of oil that are just waiting to be tapped for the good of the Nation. I keep saying we have money that is buried in the ground up there. If we harness those resources and more of the resources in the Gulf of Mexico and the Rocky Mountain West, we would be dramatically increasing our energy security, we would create tens of thousands of new jobs, and generate billions and billions of dollars year after year that could be applied to both deficit reduction and the development of new energy technologies.

I would encourage the Senate to support any amendment that strikes the SPR provision in this bill and encourage us, instead, to focus on the development of a more viable long-term energy policy.

With that, I yield the floor, and I suggest the absence of a quorum.

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