2008 Halting of Petroleum Reserve Fill Saved Taxpayers $600 Million

Markey/Welch Legislation Stopped Bush Oil Purchases at $120 a Barrel

An analysis by the Department of Energy on legislation co-authored by Reps. Ed Markey (D-Mass.) and Peter Welch (D-Vt.) to stop the high-cost filling of the nation’s oil reserves in 2008 found that the passage of the legislation saved American taxpayers $600 million dollars.

“When consumers were getting tipped upside down at the pump in 2008, we had plenty of reasons to stop filling the reserve, and now we have 600 million more,” said Rep. Markey, Chairman of the Select Committee on Energy Independence and Global Warming. “Now that oil prices are creeping up again, this is a stark reminder of the financial need for America to end its oil-centric energy policy.”

“Americans footed the bill in more ways than one as the price of oil spiraled out of control two years ago. They paid higher prices at the pump and they were forced to finance the federal government’s overpriced purchase of strategic reserves,” said Rep. Welch, a member of the House Committee on Energy and Commerce. “The hundreds of millions of dollars saved by this common-sense bill demonstrate once more the price all Americans pay as our nation remains addicted to oil.”

The Markey-Welch legislation -- the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008 (H.R. 6022) -- which passed the House and became public law 110-232 in May of 2008, directed the President to suspend shipments to the SPR through the end of 2008 or until prices dropped below $75 per barrel.

The final version of the legislation that was signed into law was authored by Reps. Markey and Welch and originated in the House.

The Department of Energy analysis, which was released today, found that had the federal government would have purchased19.5 million barrels of oil during a period of high prices to complete the fill of the reserve, which was already at 97 percent capacity, the cost would have been $1.7 billion. Instead, when the SPR resumed its fill in January 2009, at a time of lower prices, the cost was $1.1 billion, for a savings of $600 million compared to what would have occurred in 2008 absent passage of the House legislation.

Reps. Markey and Welch also sent a letter to the Department of Energy in December 2008 urging the resumption of the fill of the SPR as oil prices had declined. That letter can be found here.

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