Emergency Supplemental Appropriations Act, 2005

EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT, 2005 -- (Senate - April 15, 2005)

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Mr. SCHUMER. Mr. President, the amendment I have offered will allow the Federal Government to take long overdue action to curb the record high gasoline prices that are plaguing American consumers at the pump. As my colleagues are aware, for weeks, oil and gasoline prices have been placing an immense burden on working families. They are burning a hole in every wallet and pocketbook in America, and they are threatening our fragile recovery. The March numbers showed that consumers are not spending on other things because of the high prices of gasoline and other petroleum products. It is time this body took action to protect our Nation's economic security from sky-high oil prices and the whims of the OPEC cartel.

This amendment would provide the American consumer with relief by halting the diversion of oil from markets to the Strategic Petroleum Reserve, and by releasing an amount of oil from the reserve through a swap program in order to increase supply, quell the markets, and bring down prices at the pump.

What we are faced with is the simple market economics of supply and demand. If demand goes up, price goes up. If supply goes up, price goes down. At a

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time when we are facing recordbreaking gasoline prices, it is unfathomable that the Federal Government would actually be taking oil off the market and exacerbating the high costs of working families.

The price of crude oil has remained at near record highs for the first half of 2005. Oil has been trading at over $50 a barrel since February 22. The prices have already burdened Americans, particularly in my home State of New York and the Northeast where we rely on home heating oil to heat our homes, as people have done throughout the winter.

I know a lot of these families were hoping for a quick spring so they could enjoy relief from the high energy prices. Unfortunately, that has not been the case, as the increased burden of oil costs has just moved from the home and now, as we approach spring, to the highway. As Americans are beginning to plan for their summer vacations and road trips, the price of gasoline has reached a record high for the fourth week in a row.

The Energy Information Administration predicted that the current price of $2.28 a gallon--that is 49 cents, just about half a dollar up from last year--could give way to even higher prices in the future.

We know who is being hurt by these oil prices, and we know who is benefiting--OPEC. OPEC made over $300 billion in oil revenue last year. They stand to gain much more if the price stays in the stratosphere. And they have a policy which they keep changing. Originally, they said $22 to $28 a barrel would be their policy. Now they say they are comfortable at oil remaining at $40 to $50 permanently. I know who will not be comfortable--American families who depend on affordable oil to commute to work, heat their homes, and provide for their energy needs.

Some of my colleagues may be asking: Didn't OPEC agree to increase production by 500,000 barrels a day? The reality is that OPEC's pledge to increase production on paper has not reduced prices at the pump. OPEC cut a million barrels in the face of rising prices, and now they say they are going to raise it 500,000 barrels. But we are not sure this is happening because it may be a paper transaction. When it comes to the talk of increasing production by another 500,000 barrels, an increase that might actually result in a production raise, it is no surprise that OPEC members are balking. Venezuela, Nigeria, and Libya--all have indicated they would oppose such an increase. That is another reason we should use the SPR because there is a division in OPEC, and we can strengthen the hands of those more responsible nations that want to increase production to meet the increasing demand in the world.

What has the administration done on this? It has continued its policy of taking oil off the market and placing it in the SPR. This policy, which further tightens the oil market by taking much-needed supplies out of commerce, is slated to take an average of 85,000 barrels a day off the market during the height of the driving season.

I understand some of my colleagues are convinced the SPR should not be touched, even to safeguard our economic security. I would argue that the concerns to this degree do not properly balance America's physical security needs against our economic security needs. The SPR is now 98 percent full. We are not recommending a sale but, rather, a swap so the oil would be replaced presumably at a lower price, and we would have the full amount of oil in the SPR once again.

The administration has these tools, and yet we are letting OPEC control the whole show. If we showed them we meant business, that we were willing to mix in, they would be far more reticent, far more reluctant to raise the price at will in the light of increasing demand from China, India, our country, and other places.

It is about time we did this. I urge my colleagues to join me in protecting the pocketbook of working families from OPEC's profiteering by supporting the amendment.

I yield the floor.

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