House panel wants increase in nation's Strategic Petroleum Reserve
Thursday, October 4th 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ Amid concerns about energy security, lawmakers sent a signal to the administration Thursday that more oil should be pumped into the government's Strategic Petroleum Reserve and a House panel gave initial approval for extending liability relief to the nuclear industry.
A House subcommittee with little debate and no opposition approved a resolution formally urging that the oil reserve, which is designed to be used in case of an interruption of oil supplies, be expanded to its full capacity. The measure is expected to be taken up by the full House, possibly next week.
Supporters of the resolution said with oil prices declining, it would be the right time to buy oil for the reserve, although Congress has not yet committed any funds for additional purchases. It estimated that bringing the reserve to its full authorized capacity would cost about $6 billion over a number of years.
Meanwhile, the Energy and Commerce subcommittee on energy and air quality also approved reauthorization of the Price Anderson Act, which limits the financial liability of operators of nuclear power plants in event of an accident.
Supporters of the liability relief said it was essential for the future of the nuclear industry, which provides 20 percent of the nation's electricity. Critics have argued that the law requires the taxpayer to assume too much of the financial burden in an accident.
Under the law, the industry is liable up to $9.5 billion from various private insurance sources for damages from a nuclear accident. Critics say if a serious accident or terrorist attack should occur at the reactor, damages would be much more and the taxpayer has to foot the bill.
The liability relief, however, has broad bipartisan support both the House and Senate and is expected to move swiftly through Congress.
The resolution on the strategic oil reserve is nonbinding, but Rep. Joe Barton, R-Texas called it ``important for symbolism purposes'' to let the administration know that this is the time to put more oil aside for a possible emergency or interruption of oil imports.
In the aftermath of the Sept. 11 attacks and prospects of U.S. military retaliation, there has been concern over future oil supplies, although Middle East suppliers, including Saudi Arabia and Kuwait, have vowed to keep supplies stable.
In a report released Thursday, the Energy Department predicts oil prices will continue to remain stable and supplies adequate through this winter.
Rep. Joe Barton, R-Texas, chairman of the energy subcommittee, acknowledged no money has yet been committed for additional oil purchases, but he said he was optimistic money will be found. He said the administration also has been ``very positive'' on putting more oil into the reserve.
The Strategic Petroleum Reserve, a series of caverns along the Louisiana-Texas border, currently has 545 million barrels of crude in storage. Congress has authorized it to hold as much as 1 billion barrels, but the facility now can hold no more than 700 million barrels. Any additional expansion would require new construction, costing an estimated $500 million, said Barton.
The reserve was tapped last year when then-President Clinton ordered 30 million barrels be withdrawn as part of a swap arrangement to inject oil into the market at the time of high prices and tight inventories. At the time, presidential candidate George W. Bush strongly criticized the use of the reserve to influence prices. He has argued the oil should be used only in case of a national supply emergency or disruption of foreign supplies because of war or other emergency.
Barton said that about 1.5 million barrels of oil could be put into the reserve each week through ``royalty-in-kind'' purchases, requiring no additional money to be appropriated by Congress, should the administration want to pursue such purchases.
Rep. Richard Boucher of Virginia, the subcommittee's ranking Democrat, said increasing oil in the oil reserve ``will be a bipartisan effort'' and that he expects broad Democratic support for additional oil purchases.