By Erin Kelly
Free Press Washington Writer
May 21, 2008
WASHINGTON -- Despite his initial opposition, President Bush has signed legislation by Rep. Peter Welch of Vermont to stop stockpiling oil in the nation's emergency reserve and use it to help lower the price of gasoline at the pump.
"I think the White House saw the handwriting on the wall when the bill passed so overwhelmingly in the House and Senate last week," Welch spokesman Andrew Savage said Tuesday after learning that Bush had quietly signed the bill Monday.
By suspending shipments to the oil reserve through the end of this year, the federal government could reduce gas prices by 5 to 24 cents a gallon, Welch said. He cited independent studies by Goldman Sachs investment and banking firm and others that predicted the action would lower prices.
However, Savage acknowledged Tuesday that it is difficult to say what impact the bill will have on consumers because there are so many factors that influence the price of oil. The price of a barrel of crude oil dropped a few cents Friday when Bush said he would stop adding to the reserve, but it went up again after he failed to persuade Saudi leaders to increase the oil supply to the United States.
"As President Bush himself said after he took this same action in 2006 after Hurricane Katrina, 'Every little bit helps,'" Savage said. "If it's something that Congress can do that could help, then Congress should do it."
Bush had said that diverting oil from the reserve and putting it on the market would not have much impact on gas prices and would hurt the nation's ability to withstand a disruption in the oil supply. But Welch said the reserve does not need to be 100 percent full to keep the nation safe. The reserve, created in 1975 after the Arab oil embargo, is about 97 percent full.
Welch said the action is no substitute for a long-term strategy to increase the use of renewable energy and reduce America's dependence on foreign oil. Congress is about to take up legislation to provide tax breaks for the use of renewable energy, which Welch said would be another step in the right direction.
"This victory is one very short-term action that's part of what needs to be a long-term commitment to a new energy future," Savage said.
Contact Erin Kelly at ekelly@gns.gannett.com