"We need to do everything we can to ease the burden of high gasoline prices throughout the country. The damaging effects of Hurricane Katrina will only exacerbate the problem, which is impacting many Americans," Senator Collins said. "The SPR contains the resources to lower oil prices when gasoline prices are at an all-time high, and the President should consider using this alternate – and cheaper – source of oil."
Below is the full text of the letter.
Dear Mr. President,
In light of the severe disruption that Hurricane Katrina has caused to oil production and transportation in the Gulf of Mexico, I am writing to urge you to make maximum use of the Strategic Petroleum Reserve (SPR) in order to help hurricane victims and families across the nation who are struggling to cope with record gasoline prices.
Already high gasoline prices this summer have severely impacted many Americans. In my home state of Maine, for example, high gasoline prices have proven to be a particularly difficult burden on families, small businesses, and truckers struggling to deliver supplies across the state. Now, just as the nation should be building oil supplies for the winter heating season, Hurricane Katrina has disrupted supplies and is threatening to send already record prices even higher. If left unchecked, these price spikes could be devastating to many in my State.
Initiating a swap of oil from the SPR to increase the supply of oil is a proven way to reduce the price of gasoline and heating oil. In the fall of 2000, the Clinton Administration announced a swap of 30 million barrels over 30 days, causing prices to quickly fall by over 10% and to stabilize for nearly a year. Under a swap, the federal government could decide on a set quantity of oil to release from the SPR, and accepts bids from private companies for the rights to that oil. The companies would then bid on how much oil they are willing to return to the SPR at a later date.
An oil swap would result in a win-win situation where gasoline prices are lowered and long-term contributions to the SPR are augmented at no additional cost to the taxpayer. The SPR is intended to provide relief during periods of both natural and man-made crisis, at times when working families are struggling to make ends meet. That time is now.
Thank you in advance for your consideration.
Sincerely,
Susan M. Collins United States Senator
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