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News Release — Byron Dorgan, Senator for North Dakota

DORGAN PROPOSES GOVERNMENT HALT OIL PURCHASES FOR UNDERGROUND STRATEGIC RESERVE

Senator calls for "timeout" on putting oil underground

Wednesday, February 6, 2008

CONTACT: Justin Kitsch
or  Brenden Timpe
PHONE: 202-224-2551

Click here to view the text of the bill.

(WASHINGTON, D.C.) --- U.S. Senator Byron Dorgan (D-ND) introduced legislation Wednesday directing the Energy Secretary to temporarily stop pulling more than 50,000 barrels of oil a day off the open market to put it underground in the Strategic Petroleum Reserve when crude oil prices are at record levels.

Under Dorgan’s plan, the federal government would suspend acquisition of oil for the Strategic Petroleum Reserve for the rest of 2008 or until the price of petroleum falls to $50 or less.

“It makes no sense to be storing oil underground in a strategic petroleum reserve that is already nearly 97 percent full when oil and gasoline prices are at record highs,” Dorgan said. “Oil topped $100 per barrel earlier this year and stocking up to put it underground drives gas prices higher by removing oil from the market.”

Dorgan said “topping off” the Strategic Petroleum Reserve at this time adds little to the nation’s energy security. According to the Department of Energy, U.S. strategic petroleum reserves as well as private oil stocks and refinery inventories hold the equivalent of 118 days of imports, well in excess of the 90 days required by international treaty obligations.

But putting oil underground contributes to driving up the cost of oil on the open market.

“We need to use a little common sense here,” Dorgan said. “I believe maintaining the current reserve is important for our economy and national security but the time to stock up is not when prices are highest. We have enough oil in the reserve for now, and we ought to wait until prices are more reasonable before adding further to those stocks.”

“A temporary pause in making these purchases would stimulate the economy. It would help moderate energy prices, and it would benefit consumers directly,” Dorgan said.

Dorgan introduced the bill in the Senate with a bi-partisan group of Senators, including Senator Jeff Bingaman (D-NM), Senator Carl Levin (D-MI), Senator John Kerry (D-MA), Senator Susan Collins (R-ME), Senator Joe Lieberman (ID-CT) and Senator Ron Wyden (D-OR).

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