Senator Markey Calls on Trump to Tap Strategic Petroleum Reserve to Protect Consumers
Senator Cites Refinery Outages Following Hurricane Harvey And Rising Gasoline Prices
Washington (August 30, 2017) – Senator Edward J. Markey (D-Mass.), a member of the Environment and Public Works Committee, today called on President Donald Trump to protect consumers from rising fuel prices in the wake of Hurricane Harvey by tapping the Strategic Petroleum Reserve (SPR).
Our nation's stockpile of crude oil and refined fuels is to be used in the case of supply disruptions or price emergencies.
In a letter sent today to the President, Senator Markey notes that Hurricane Harvey has forced the shutdown of nearly 20 percent of our nation’s oil refining capacity—including America’s largest refinery—and urges President Trump to tap the SPR to help consumers and mitigate price pressure, citing an eight percent increase in gasoline futures coupled with a three percent drop in benchmark crude that is affecting the price paid by consumers at the pump. Retail gas prices have increased six cents since last week.
“An immediate release of gasoline or crude oil, if also warranted, from the SPR would help protect consumers from price spikes at the pump and tame any market speculation that could be unduly affecting markets and harming consumers,” writes Senator Markey in his letter to President Trump.
Full text of Senator Markey's letter is below and HERE.
President Donald J. Trump
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President,
As Hurricane Harvey impacts refineries located along the Gulf Coast, I urge you to tap the Strategic Petroleum Reserve (SPR) to help consumers and mitigate upward pressure on refined product markets.
An immediate release of gasoline or crude oil, if also warranted, from the SPR would help protect consumers from price spikes at the pump and tame any market speculation that could be unduly affecting markets and harming consumers.
Since Hurricane Harvey made landfall, prices for U.S. gasoline futures surged earlier this week by more than eight percent—to a level not seen since July 2015. According to the American Automobile Association (AAA), retail gas prices have already begun to rise across the country as a result of this disaster as well—they have increased six cents since last week. This gasoline price spike has occurred despite the fact that the price for U.S. benchmark crude oil has fallen more than three percent during that time. These price impacts have continued today, with U.S. gasoline futures rising six percent in intraday trading even as crude oil prices continued to decline by one percent. Tapping the SPR could help protect consumers by addressing this market dynamic of the divergence of gasoline and oil prices and any speculation that may be further fueling it.
The hurricane has forced the shutdown of nearly 20 percent of our nation’s oil refining capacity, including America’s largest refinery—Motiva Port Arthur—and this could put significant additional pressure on our nation’s gasoline supply in the days ahead. In the Mid-Atlantic and Northeast region, refineries remain fully operational, but gasoline inventories were already nearly 10 percent below last year’s level before the storm. I am concerned that these low inventory levels further raise the risk that gasoline prices will continue to increase, harming families in Massachusetts and across the nation. Immediately tapping the SPR, including using the SPR authority to release gasoline from the Northeast Gasoline Supply Reserve, could help protect consumers by putting downward pressure on markets and combating any market speculation that may be occurring.
Going forward, I urge you to also continue to monitor market conditions closely to ensure that refineries not located along the Gulf Coast that remain operational can remain fully supplied. Releasing oil from the SPR could help ensure that there is no disruption in oil supplies to these refineries from the storm, should any occur.
The SPR has a proven record of effectively protecting consumers from price spikes in gasoline, home heating oil, diesel or other fuels. I urge you to tap the SPR in response to Hurricane Harvey to help protect families in Massachusetts and across the country from rising prices.
Edward J. Markey