FOR IMMEDIATE RELEASE November 17, 1999

SCHUMER, COLLINS INTRODUCE LEGISLATION CONCERNING RELEASE OF STRATEGIC PETROLEUM RESERVES TO STABILIZE OIL PRICES

Bipartisan Bill Will Make it Easier for Administration to Use the SPR

US Senators Charles E. Schumer (D-NY) and Susan Collins (R-ME) today introduced the Oil Price Safeguard Act, which makes it easier for the Administration to use the Strategic Petroleum Reserve when faced with anti-competitive foreign producers who manipulate the price of oil.

"When a shortfall in oil prices is due to opportunistic manipulations by foreign producers, especially to the degree that will harm our economic well-being, we have a right to act in our own defense," said Sen. Schumer.

Because of the Organization of Petroleum Exporting Countries' (OPEC) new policy of restricting world oil supply far below demand, the price of crude oil has increased dramatically, which has caused parallel increases in gasoline and home heating oil prices. At an OPEC meeting in late September, OPEC ministers reaffirmed their earlier production quotas, thereby ensuring that world oil demand will exceed world supply by more than two million barrels per day. In addition, OPEC recently announced that it will not revisit the issue of supply until March 2000. Yesterday, crude oil prices climbed to $25.75 a barrel at the New York Mercantile Exchange, a 34-month record high and more than double the March 1, 1999 price of about $12 a barrel.

"Consumers, as well as businesses, are hurt by expensive petroleum products," said Sen. Collins. "A rise in crude oil prices increases the price of home heating oil and gasoline. Northern states such as Maine and New York are particularly hard hit by increased oil prices because of the need to heat homes through long, cold winters."

The Schumer-Collins legislation provides the Energy Secretary with the authority to draw down the Strategic Petroleum Reserve when oil and gas prices in the US rise sharply because of anti- competitive activity. Specifically, it adds language to the Energy Policy and Conservation Act of

1975 and the Energy Policy Act of 1992, stating that a sustained price increase caused by anti- competitive practices by foreign producers may be deemed significant enough to trigger the release of oil from the SPR.

"This legislation would show foreign producers that the US will intervene into unfair markets to protect our domestic economy: we will say loud and clear that our national economic health is a national security issue," said Sen. Schumer. "That knowledge may be sufficient to prevent OPEC from extensive oil market manipulations in the first place."

The bill also requires the Administration to consult with Congress regarding the sale of oil from the SPR when prices rise for a sustained period. The Schumer Collins legislation asks for a review by the Department of Energy if the price of oil rises above $25 for more than 14 days, including a report to Congress within 30 days after the 14 day period.

"This bill will give the President more flexibility in using the Strategic Petroleum Reserve to protect American consumers," said Sen. Collins. "It also will require the President to explain to Congress and the American people why actions available to the President have not been exercised to protect consumers."

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