DORGAN CALLS FOR MORE DRILLING, LESS OIL SPECULATION, AND 'MOON SHOT' FOR RENEWABLES
Senator outlines plan to bring down sky-high oil prices that hurt economy, American consumers
Tuesday, August 5, 2008
CONTACT: Justin Kitsch
or Brenden Timpe
PHONE: 202-224-2551
(BISMARCK, N.D.) --- U.S. Senator Byron Dorgan, a senior member of the Senate Energy Committee, said Tuesday he is pushing Congress to take four immediate steps to bring down oil and gas prices and move our country in a new direction to make us less dependent on foreign oil in the future.
The four steps in Dorgan’s plan to put immediate downward pressure on gas prices and move toward energy independence are:
1) Crack down on speculation. Eliminate excess speculation in the oil futures market. Dorgan’s plan calls for establishing tough position limits on contracts traded by speculators who don’t plan to deliver or accept delivery of oil. Some experts have testified that from 20 to 40 percent of the current price of oil and gas is a result of excess speculation in the oil futures market. Dorgan is the chief sponsor of legislation in the Senate on this subject.
2) New drilling. Open up a major portion of the eastern Gulf of Mexico for new drilling. Dorgan was an original author of legislation two years ago that opened an 8 million-acre area of the Gulf known as Lease 181 for drilling. There is an estimated 45 billion barrels of recoverable oil in the Gulf and it should be available for drilling. We should also allow U.S. companies to compete for drilling leases in Cuban waters.
3) Release oil from the SPR. Release 70,000 barrels of light sweet crude, the most valuable kind of oil, from the Strategic Petroleum Reserve over the coming months to put more oil in the marketplace and put immediate downward pressure on prices. The oil will be replaced with heavy crude over the next year.
4) Aggressively fund renewable energy. Establish an aggressive, 10-year renewable energy and energy conservation plan designed to eliminate our dependence on foreign oil. We can’t just drill our way out of the energy problem. We need to develop, on an urgent basis, new, renewable energy sources to replace the oil we get from foreign countries and we need bold conservation plans with aggressive targets. As a first step, we should immediately pass a $17 billion tax package that would stimulate investment in energy efficiency and renewable energy markets.
“The current price spike in oil and gas prices should be a wake-up call for our country and the Congress,” Dorgan said. “Regrettably, the Congress is gridlocked with both political parties refusing to support all that is necessary to fix the energy problem.
“Democrats need to support more drilling, and Republicans need to join in shutting down the excess speculation in the oil futures markets. And both need to support real conservation and a ‘moon shot’ approach to developing our renewable sources of energy. It’s time to get the best of what both political parties can offer rather than the worst of each. This is no time for partisanship. It’s time to enact a serious plan that will free us from our dependence on foreign oil.”
Dorgan was joined by Lynn Westfall, chief economist at Tesoro, and Paul Goulding, chairman of the North Dakota Petroleum Marketers Association. The speculation-fueled rise in oil prices has squeezed both organizations as well as their customers. They called on Congress to approve legislation Dorgan has introduced that would cut down on speculation in the oil futures market.
“High crude prices do not benefit independent refiners like Tesoro, who own no crude but must purchase it from third parties,” Westfall said. “Every month we spend almost $3 billion to buy crude oil, our single largest cost of doing business. Speculation in oil futures markets has been a significant cause of these high prices, which inhibit our ability to invest in growing our refinery assets such as the Mandan facility.”
“The North Dakota Petroleum Marketers Association applauds Senator Dorgan for his perception and responsiveness to the current energy crisis and the speculation issue,” said Paul Goulding, Chairman of the North Dakota Petroleum Marketers Association. “Excessive speculation in the oil futures market has driven petroleum prices to an unrealistic level. The NDPMA supports Senator Dorgan's efforts, and we can be proud that he is representing North Dakota in Washington, D.C.”
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