Senate OKs halting deliveries to U.S. oil reserve

By Tom Doggett May 13, 2008 

WASHINGTON (Reuters) - The U.S. Senate voted on Tuesday to suspend oil deliveries to the country’s Strategic Petroleum Reserve until crude prices fall below $75 a barrel, repudiating the Bush administration’s policy of boosting the stockpile at time of record oil and gasoline prices.

The proposal to halt shipments to the emergency oil reserve, which cleared the Senate in a 97 to 1 vote, was tacked on to a flood insurance reform bill that also passed.

The House of Representatives was expected later on Tuesday to vote on a similar measure that supporters believed would put more oil supplies in the market and help lower energy prices.

The Bush administration opposes suspension of the oil shipments, saying the move would have little effect on cutting oil prices which hit a record near $127 a barrel on Tuesday.

However, the Senate vote approving the underlying flood insurance bill was 92 to 6, enough to override a presidential veto of the measure.

The White House says the United States needs a bigger emergency oil reserve than the current 703 million barrels held at four underground storage sites in Texas and Louisiana to offset any major supply disruptions.

“In the short run … we can stop putting oil underground and put some downward pressure on gas prices and oil prices,” said Democrat Byron Dorgan, the main sponsor of the proposal. “When the American consumer is being burned at the stake by high gas prices this government ought not be carrying the wood. It’s just that simple.”

The amount of oil going into the reserve during the first half of this year will average about 70,000 barrels a day. However, shipments will be highest in May, totaling 3.8 million barrels this month, which is equal to almost 123,000 barrels a day.

The Energy Department on Tuesday received bids from oil companies to add millions of barrels of additional crude to the reserve for the second half of this year.

“As we work to increase our nation’s energy security, we should be taking steps to strengthen our energy insurance policy, not weaken it,” said department spokeswoman Megan Barnett.

Democratic presidential candidates Hillary Clinton and Barack Obama voted to halt future oil deliveries. Republican presidential challenger John McCain was campaigning and missed the vote.

Separately, the Senate rejected a broader Republican energy measure which in addition to stopping oil deliveries to the reserve would have allowed oil drilling in the Arctic National Wildlife Refuge and off coastal states where energy exploration is now banned.

Lee ADDS: The Democrats will halt oil storage but will not vote for new oil! Such hypocrisy…Insufferable idiots!