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DONNELLY URGES PRESIDENT OBAMA TO OPEN STRATEGIC PETROLEUM RESERVE, LOWER GAS PRICES

March 27, 2012
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   03/28/12 On Monday, Congressman Joe Donnelly sent a letter to President Obama urging him to open the Strategic Petroleum Reserve (SPR). Opening the SPR has temporarily reduced gas prices in the past. Last year, President Obama’s order to release 30 million barrels of oil from the SPR lead to a six percent reduction in gas prices, and in 2005 former President George W. Bush’s order to release nearly 21 million barrels reduced gas prices by over 19 percent.

“The fastest way to provide relief at the pump for families and small businesses across Indiana and the country would be to temporarily suspend purchases of oil for and also release oil from the SPR,” said Donnelly. “With high unemployment, record high gas prices are hurting Hoosier families and businesses even more than in normal economic times.”

In his letter, Donnelly also urged President Obama to take other actions that would lower gas prices: curb oil speculation and expand exploration and drilling for oil in the U.S.

Rampant speculation is distorting the oil market and is subsequently leaving Hoosiers victim to Wall Street traders.  A recent article in Forbes—using data from a Goldman Sachs report—stated that oil speculation is adding $0.56 to the price of a gallon of gasoline.

Expanding exploration and drilling for oil here in the U.S. would lower gas prices by increasing the domestic supply of oil. These actions would also benefit us by decreasing our dependence on oil from countries that do not have our best interests in mind, and by reducing our national debt through the sale of new oil leases.

You can read a PDF of Donnelly’s letter here. The full text of the letter is below:

 

March 26, 2012

 

President Barack Obama

The White House

1600 Pennsylvania Avenue NW

Washington, DC 20500

 

Dear Mr. President:

I am writing today regarding rising gas prices.  I believe there are several actions our country should take to achieve immediate and long-term reduction in prices.

As you know, we have seen gas prices rise quickly and steadily this year, reaching a nationwide average of $3.79 last week.  Records are already falling, with February 2012 breaking the previous February high by 30 cents per gallon, and this summer is shaping up to be worse.  With high unemployment, these spikes and record highs are hurting Hoosier families and businesses even more than in normal economic times.  We must act now to soften the impact high gas prices are having on our economy.

The fastest way to provide relief at the pump for families and small businesses across Indiana and the country would be to temporarily suspend purchases for and release oil from the Strategic Petroleum Reserve (SPR).  This action has proven effective in the past.  Last year your order to release 30 million barrels lead to a six percent reduction in gas prices and in 2005 President George W. Bush saw gas prices reduced by over 19 percent after he released nearly 21 million barrels of oil from the SPR.

An additional step that would have a quick impact would be to rein in the rampant speculation that is distorting the oil market and subsequently leaving Hoosiers victim to Wall Street traders.  A recent article in Forbes—using data from a Goldman Sachs report—stated that oil speculation is adding $0.56 to the price of a gallon of gasoline.  The Commodity Futures Trading Commission (CFTC) was required by The Wall Street Reform and Consumer Protection Act of 2010 to enact strong position limits by January 2011to eliminate excessive oil speculation that causes increases in gas prices, a deadline that has long since passed.  I urge you to pressure the CFTC to act immediately on this issue.

Further reductions in gas prices could be attained in the medium and long term by increasing the domestic supply of oil.  That is why I support expanding exploration and drilling for oil here in the United States.  Utilizing the vast resources available to us domestically would also benefit us by decreasing our dependence on oil from countries that do not have our best interests in mind and by reducing our national debt through the sale of new oil leases.

However, we can continue to discuss how we best accomplish these medium- and long-term goals.  What we need now is action to provide relief for hard-working families, and I believe releasing oil from the SPR is critical to achieving this.

Thank you for your consideration.

 

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One Response to “ DONNELLY URGES PRESIDENT OBAMA TO OPEN STRATEGIC PETROLEUM RESERVE, LOWER GAS PRICES ”

  1. Thor on April 3, 2012 at 7:56 am

    Hey, Joe,

    It’s not called the Inconvenience Reserve…and it’s not supposed to be used by politicians to try and boister their election prospects.

    You’ve done your best to represent SoCal, not Northern Indiana for your entire tenure…until just now when you lost your heavily gerimandered district.

    So, P.T. Barnum/Donnelly, sell it somewhere else…maybe run along side your pal Pelosi.